MISSISSIPPI LEGISLATURE
2018 Regular Session
To: Insurance
By: Representative Scott
AN ACT TO CREATE A SMALL BUSINESS HEALTH INSURANCE POOL; TO PROVIDE FOR EMPLOYER PREMIUM INCENTIVE PAYMENTS, EMPLOYEE PREMIUM ASSISTANCE PAYMENTS, AND TAX CREDITS TO BE ADMINISTERED BY THE COMMISSIONER OF INSURANCE FOR ELIGIBLE SMALL EMPLOYERS WHO PROVIDE CERTAIN GROUP HEALTH PLAN COVERAGE FOR THEIR ELIGIBLE EMPLOYEES; TO PROVIDE THAT CERTAIN ELIGIBLE SMALL EMPLOYERS MAY RECEIVE PREMIUM INCENTIVE PAYMENTS AND EMPLOYEES MAY RECEIVE ASSISTANCE FOR PAYING PREMIUMS FOR HEALTH INSURANCE PURCHASED THROUGH THE SMALL BUSINESS HEALTH INSURANCE POOL; TO ALLOW THE TAX CREDIT TO BE CLAIMED WHEN FILING TAX RETURNS; TO CREATE THE SMALL BUSINESS HEALTH INSURANCE POOL BOARD OF DIRECTORS AND ESTABLISH ITS DUTIES; TO PROVIDE AUTHORITY TO THE BOARD TO ESTABLISH ELIGIBILITY REQUIREMENTS FOR RECEIVING THE PREMIUM INCENTIVE PAYMENTS, PREMIUM ASSISTANCE PAYMENTS, AND TAX CREDITS; TO PROVIDE RULEMAKING AUTHORITY TO THE COMMISSIONER TO IMPLEMENT THE PREMIUM INCENTIVE PAYMENTS, PREMIUM ASSISTANCE PAYMENTS, AND TAX CREDITS; TO PROVIDE PENALTIES FOR WRONGFULLY OBTAINING PREMIUM INCENTIVE PAYMENTS, PREMIUM ASSISTANCE PAYMENTS, OR THE TAX CREDIT; TO AUTHORIZE THE DIVISION OF MEDICAID TO PURSUE MEDICAID FUNDING FOR EMPLOYEE PREMIUM ASSISTANCE; TO BRING FORWARD SECTIONS 27-7-15, 27-69-13, 27-69-75, 97-17-41 AND 97-17-43, MISSISSIPPI CODE OF 1972, FOR THE PURPOSES OF AMENDMENT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. (1) There is established a nonprofit legal entity known as the small business health insurance pool, with participating membership consisting of all employer members of the purchasing pool.
(2) The small business health insurance pool is created as a voluntary purchasing pool pursuant to the provisions contained in Section 13 of this act.
(3) Subject to the conditions in Section 14 of this act, the purchasing pool shall make group health plan coverage available effective January 1, 2019.
(4) It is the intent of the Legislature that the board:
(a) Establish criteria that will allow the greatest number of employees possible to be eligible for premium assistance payments by not permitting eligibility for premium assistance payments under Sections 1 through 9 of this act to employees who continue to maintain enrollment in another comprehensive health insurance coverage through a spouse, parent, or other person; and
(b) Allow eligible small employers to determine the length of the waiting period that will apply to their employees, as long as the waiting period:
(i) Is not more than twelve (12) months; and
(ii) Applies to all eligible employees within that small group in the same manner.
(5) The PEER Committee shall conduct or have conducted, at least once each biennium covering the prior two (2) fiscal years, a financial compliance audit of the board and the purchasing pool. The cost of the audit must be paid for by the purchasing pool as a direct cost not subject to the cap on administrative expenses.
SECTION 2. As used in Sections 1 through 9 of this act, the following definitions apply:
(a) "Board" means the board of directors of the small business health insurance pool as provided for in Section 3 of this act.
(b) "Commissioner" means the Commissioner of Insurance.
(c) "Dependent" means:
(i) A spouse;
(ii) An unmarried child under twenty-five (25) years of age:
1. Who is not an employee eligible for coverage under a group health plan offered by the child's employer for which the child's premium contribution amount is no greater than the premium amount for coverage as a dependent under a parent's individual or group health plan;
2. Who is not a named subscriber, insured, enrollee, or covered individual under any other individual health insurance coverage, group health plan, government plan, church plan, or group health insurance;
3. Who is not entitled to benefits under 42 USCS 1395, et seq.; and
4. For whom the parent has requested coverage;
(iii) A child of any age who is disabled and dependent upon the parent; or
(iv) Any other individual defined as a dependent in the health benefit plan covering the employee.
(d) "Eligible employee" means an employee who works on a full-time basis with a normal work week of thirty (30) hours or more, except that at the sole discretion of the employer, the term may include an employee who works on a full-time basis with a normal work week of between twenty (20) and forty (40) hours as long as this eligibility criteria is applied uniformly among all of the employer's employees. The term includes a sole proprietor, a partner of a partnership, and an independent contractor if the sole proprietor, partner, or independent contractor is included as an employee under a health benefit plan of a small employer. The term also includes those persons eligible for coverage under Section 25-15-3(a). The term does not include an employee who works on a part-time, temporary, or substitute basis.
(e) (i) "Eligible small employer" means an employer who is sponsoring or will sponsor a group health plan and who employed at least two (2) but not more than nine (9) employees during the preceding calendar year and who employs at least two (2) but not more than nine (9) employees on the first day of the plan year.
(ii) The term includes small employers who obtain group health plan coverage through a qualified association health plan.
(f) "Group health plan" means an employee welfare benefit plan, as defined in 29 USCS 1002(1), to the extent that the plan provides medical care and items and services paid for as medical care to employees or their dependents, directly or through insurance, reimbursement, or otherwise.
(g) "Premium" means the amount of money that a health insurance issuer charges to provide coverage under a group health plan.
(h) "Premium assistance payment" means a payment provided for in Section 6 of this act on behalf of eligible employees who qualify to be applied on a monthly basis to premiums paid for group health plan coverage through the purchasing pool or through qualified association health plans.
(i) "Premium incentive payment" means a payment provided for in Section 7(1)(b) of this act to eligible small employers who qualify under Section 7 of this act to be applied to premiums paid on a monthly basis for group health plan coverage obtained through the purchasing pool or through qualified association health plans.
(j) "Purchasing pool" means the small business health insurance pool.
(k) "Qualified association health plan" means a plan established by an association whose members consist of employers who sponsor group health plans for their employees and purchase that coverage through an association that qualifies as a bona fide association or nonbona fide, as provided for in administrative rule. For the purposes of this section, "bona fide association" means an association that: (a) has been actively in existence for at least five (5) years; (b) was formed and has been maintained in good faith for purposes other than obtaining insurance; (c) does not condition membership in the association on a health status-related factor relating to an individual, including an employee of an employer or a dependent of an employee; (d) makes health insurance coverage offered through the association available to a member regardless of a health status-related factor relating to the member or an individual eligible for coverage through a member; and (e) does not make health insurance coverage offered through the association available other than in connection with a member of the association. A qualified association health plan is subject to applicable employer group health insurance law and must receive approval from the commissioner to operate as a qualified association health plan for the purposes of Sections 1 through 9 of this act.
(l) "Related employers" means persons having a relationship as described in Section 267 of the Internal Revenue Code, 26 USCS 267.
(m) "Tax credit" means a refundable tax credit as provided for in Section 8 of this act.
(n) "Tax year" means the taxpayer's tax year for federal income tax purposes.
SECTION 3. (1) There is a board of directors of the small business health insurance pool, consisting of seven (7) directors and two (2) nonvoting members serving three-year staggered terms and appointed in the following manner:
(a) Three (3) directors must be appointed by the commissioner, one (1) of whom must be a person who has specialized knowledge regarding health insurance, one (1) of whom must be a consumer representing the small business community, and one (1) of whom must be a consumer representing the public interest;
(b) Four (4) directors must be appointed by the Governor, one (1) of whom must be a management-level individual with knowledge of state employee health benefit plans, one (1) of whom must be a management-level individual with knowledge of Medicaid services, one (1) of whom must be a consumer representing the public interest, and one (1) of whom must be a consumer representing the small business community.
(2) Each director is entitled to one (1) vote on the board.
(3) The commissioner and the Governor shall each appoint a representative from their respective staffs to participate in all board meetings as nonvoting members.
(4) The directors must be compensated and receive travel expenses in the same manner as members of the quasi-judicial boards under Section 25-3-69. The costs of conducting the meetings of the purchasing pool and the compensation for its board of directors must be borne by the purchasing pool.
(5) A board director or member must be replaced in the same manner as the original appointment if that board member is not actively participating in the affairs of the board.
SECTION 4. (1) The board shall:
(a) Establish an operating plan that includes, but is not limited to, administrative and accounting procedures for the operation of the purchasing pool and a schedule for premium incentive and premium assistance payments and that complies with the powers and duties provided for in this section;
(b) Require employers and employees to reapply for premium incentive payments or premium assistance payments on an annual basis;
(c) Upon reapplication, give priority to employers and their employees who are already receiving the premium incentive payments and premium assistance payments;
(d) Upon reapplication, allow employers to retain eligibility to receive premium incentive payments and premium assistance payments on behalf of their eligible employees if the number of their employees goes over the maximum number, not to exceed nine (9) employees, established by the commissioner in administrative rule;
(e) Renew purchasing pool group health plan coverage for all employer groups, even if the employer group no longer receives or is eligible for a premium incentive payment;
(f) Adopt a premium incentive payment amount that is the same for all registered eligible small employers who join the purchasing pool or obtain qualified association health plan coverage;
(g) Adopt premium assistance payment amounts that, in combination with the premium incentive payments, are consistent with the amounts provided for in Sections 6 and 8 of this act or with the assistance of the Division of Medicaid, adopt a premium assistance payment schedule that is equitably proportional to the income or wage level for eligible employees;
(h) Establish criteria for determining which employees will be eligible for a premium assistance payment and the amount that the employees will receive from among those eligible small employer groups that have registered with the commissioner pursuant to Section 8 of this act and applied for coverage under the purchasing pool group health plan or qualified association health plan. However, to the extent that federal funds are used to make some premium assistance payments, criteria for those payments must be consistent with any waiver requirements determined by the Division of Medicaid pursuant to Section 10 of this act. Eligibility for employees is not limited to the waiver eligibility groups;
(i) Make appropriate changes to eligibility or other elements in the operating plan as needed to reach the goal of expending ninety percent (90%) of the funding dedicated to premium incentive payments and premium assistance payments during the current biennium;
(j) Limit the total amount of premium incentive payments and premium assistance payments paid to the amount of available state, federal and private funding;
(k) Approve no more than six (6) fully insured group health plans with different benefit levels that will be offered to employers participating in the purchasing pool;
(l) Prepare appropriate specifications and bid forms and solicit bids from health insurance issuers authorized to do business in this state;
(m) Contract with no more than three (3) health insurance issuers to underwrite the group health plans that will be offered through the purchasing pool;
(n) Request that the Division of Medicaid seek a federal waiver for Medicaid matching funds for premium assistance payments based on the department's analysis, as provided in Section 10 of this act, if it is in the best interests of the purchasing pool;
(o) Comply with the participation requirements provided for in Section 16 of this act;
(p) Meet at least four (4) times annually; and
(q) Within two (2) years after the purchasing pool is established and considered stable by the board, examine the possibility of offering an opportunity for individual sole proprietors without employees to purchase insurance from the purchasing pool without premium incentive payments, premium assistance payments, or tax credits.
(2) The board may:
(a) Borrow money;
(b) Enter into contracts with insurers, administrators, or other persons;
(c) Hire employees to perform the administrative tasks of the purchasing pool;
(d) Assess its members for costs associated with administration of the purchasing pool and request that the commissioner transfer funds, or request that the Division of Medicaid transfer funds from the special fund created in Section 14 of this act, for that purpose;
(e) Set contribution levels for employers;
(f) Request that funds be transferred from the funds appropriated for premium incentive payments and premium assistance payments to the general fund to offset tax credits if the number of eligible small employers seeking premium incentive payments and employees receiving premium assistance payments is insufficient to exhaust at least ninety percent (90%) of the appropriated funds for the premium incentive and assistance payments during a biennium;
(g) Seek other federal, state and private funding sources;
(h) Accept all small employer groups who apply for coverage under the small business health insurance pool group health plan even if they are not eligible for any tax credit or premium incentive payment and have not been registered by the commissioner pursuant to Section 8 of this act;
(i) Receive from the commissioner's office or the Division of Medicaid premium incentive payments on behalf of eligible small employers and premium assistance payments on behalf of eligible employees, collect the employer or employee premiums from the employer or employees, and make premium payments to insurers on behalf of the eligible small employers and employees;
(j) Request the commissioner to direct more than thirty percent (30%) of the available funding for premium incentives and premium assistance payments to qualified association health plan coverage instead of purchasing pool coverage; and
(k) Pay appropriate commissions to licensed insurance producers who market purchasing pool coverage.
SECTION 5. Subject to the conditions in Section 14 of this act, the commissioner shall:
(a) Adopt rules regarding the implementation of Sections 1 through 9 of this act, including rules regarding the administration of the premium incentive payments, premium assistance payments, and tax credits, the approval of qualified association health plans, and the registration process. The rules regarding tax credits may not relate to the filing of tax returns and claiming the tax credit on the tax returns;
(b) Supervise the creation of the purchasing pool within the limits described in Sections 1 through 9 of this act;
(c) Approve or disapprove the operating plan for the purchasing pool;
(d) If the board chooses to hire one, approve or disapprove the selection of a third-party administrator to handle the administration of the purchasing pool;
(e) With the assistance of the Division of Medicaid, approve or disapprove the schedule of premium incentive payment or premium assistance payment amounts adopted by the board as provided in Section 4 of this act;
(f) Approve or disapprove any contracts between a health insurance issuer and the purchasing pool;
(g) Approve or disapprove all group health plans being offered by insurers through the purchasing pool;
(h) Conduct periodic audits of the financial transactions conducted by the purchasing pool;
(i) Allow up to thirty percent (30%), or more if requested by the board and approved by the commissioner, of the available funding for the premium incentive payments and premium assistance payments to be applied to small group health plan coverage purchased through a qualified association health plan;
(j) Make applicable premium incentive payments or premium assistance payments for qualified association health plan coverage on behalf of eligible small employers and employees or direct the purchasing pool to make the payments; and
(k) Approve or disapprove associations as qualified if their members consist of employers who sponsor group health plan coverage for their employees and purchase that coverage through an association that qualifies as a bona fide association or nonbona fide, as provided for in administrative rule. For the purposes of this section, "bona fide association" means an association that: (a) has been actively in existence for at least five (5) years; (b) was formed and has been maintained in good faith for purposes other than obtaining insurance; (c) does not condition membership in the association on a health status-related factor relating to an individual, including an employee of an employer or a dependent of an employee; (d) makes health insurance coverage offered through the association available to a member regardless of a health status-related factor relating to the member or an individual eligible for coverage through a member; and (e) does not make health insurance coverage offered through the association available other than in connection with a member of the association. A qualified association health plan is subject to applicable employer group health insurance law.
SECTION 6. (1) An employer is eligible to apply for premium incentive payments and premium assistance payments or a tax credit under Sections 1 through 9 of this act if the employer and any related employers:
(a) Did not have more than the number of employees established for eligibility by the commissioner at the time of registering for premium incentive payments or premium assistance payments or a tax credit under Section 8 of this act;
(b) Provide or will provide a group health plan for the employer's and any related employer's employees;
(c) Do not have delinquent state income tax liability owing to the Department of Revenue from previous years;
(d) Have been registered as eligible small employer participants by the commissioner as provided in Section 8 of this act; and
(e) Do not have any employees, not including an owner, partner, or shareholder of the business, who received more than Seventy-five Thousand Dollars ($75,000.00) in gross compensation, including bonuses and commissions, from the small employer or related employer in the prior tax year.
(2) The commissioner shall establish, by rule, the maximum number of employees that may be employed to qualify as a small employer under subsection (1). However, the number may not be less than two (2) employees or more than nine (9) employees. The maximum number may be different for employers seeking premium incentive payments and premium assistance payments than for employers seeking a tax credit. The number must be set to maximize the number of employees receiving coverage under Sections 1 through 9 of this act. The commissioner may not change the maximum employee number more often than every six (6) months. If the maximum number of allowable employees is changed, the change does not disqualify registered employers with respect to the tax year for which the employer has registered.
(3) Except as provided in subsection (4), an eligible small employer may claim a tax credit in the following amounts:
(a) (i) Not more than One Hundred Dollars ($100.00) each month for each employee and One Hundred Dollars ($100.00) each month for each employee's spouse, if the employer covers the employee's spouse, if the average age of the group is under forty-five (45) years of age; or
(ii) Not more than One Hundred Twenty-five Dollars ($125.00) each month for each employee and One Hundred Dollars ($100.00) each month for each employee's spouse, if the employer covers the employee's spouse, if the average age of the group is forty-five (45) years of age or older; and
(b) Not more than Forty Dollars ($40.00) each month for each dependent, other than the employee's spouse, if the employer is paying for coverage for the dependents, not to exceed two (2) dependents of an employee in addition to the employee's spouse.
(4) An employer may not claim a tax credit:
(a) In excess of fifty percent (50%) of the total premiums paid by the employer for the qualifying small group;
(b) For premiums paid from a medical care savings account provided for in Chapter 9, Title 71, Mississippi Code of 1972; or
(c) For premiums for which a deduction is claimed under Section 27-7-17.
(5) An employer may not claim a premium incentive payment in excess of fifty percent (50%) of the total premiums paid by the employer for the qualifying small group.
SECTION 7. (1) An eligible small employer may:
(a) Apply the tax credit against taxes due for the current tax year on a return filed pursuant to Chapter 7, Title 27, Mississippi Code of 1972; or
(b) If the eligible small employer did not sponsor a group health plan for employees during the two (2) years prior to the first tax year of registration for the premium incentive payments or premium assistance payments or operates a new business that is less than two (2) years old and has never sponsored a group health plan, apply to receive monthly premium incentive payments and premium assistance payments to be applied to coverage obtained through the purchasing pool or qualified association health plan coverage approved by the commissioner.
(2) An eligible small employer may not, in the same tax year, apply the tax credit against taxes due for the current tax year as provided for in subsection (1)(a) of this section and receive premium incentive payments as provided for in subsection (1)(b) of this section.
(3) The premium incentive payments and premium assistance payments provided for in subsection (1)(b) of this section must be paid pursuant to a plan of operation implemented by the board and any applicable administrative rules.
(4) (a) If an eligible small employers' tax credit as provided in subsection (1)(a) of this section exceeds the employer's liability under Chapter 7, Title 27, Mississippi Code of 1972, the amount of the excess must be refunded to the eligible small employer. The tax credit may be claimed even if the eligible small employer has no tax liability under Chapter 7, Title 27, Mississippi Code of 1972.
(b) A tax credit is not allowed under Chapter 7, Title 27, Mississippi Code of 1972, with respect to any amount for which a tax credit is allowed under Sections 1 through 9 of this act.
(5) The Department of Revenue or the commissioner may grant a reasonable extension for filing a claim for premium incentive payments or premium assistance payments or a tax credit whenever, in the department's or the commissioner's judgment, good cause exists. The Department of Revenue and the commissioner shall keep a record of each extension and the reason for granting the extension.
(6) (a) If an employer that would have a claim under Sections 1 through 9 of this act ceases doing business before filing the claim, the representative of the employer who files the tax return or pays the premium may file the claim.
(b) If a corporation that would have a claim under Sections 1 through 9 of this act merges with or is acquired by another corporation and the merger or acquisition makes the previously eligible corporation ineligible for the premium incentive payments, premium assistance payments, or tax credit in the future, the surviving or acquired corporation may file for the premium incentive payments, premium assistance payments, or tax credit for any claim period during which the former eligible corporation remained eligible.
(c) If an employer that would have a claim under Sections 1 through 9 of this act files for bankruptcy protection, the receiver may file for the premium incentive payments, premium assistance payments, or tax credit for any claim period during which the employer was eligible.
SECTION 8. (1) (a) Each eligible small employer that proposes to apply for premium incentive payments and premium assistance payments or a tax credit under Sections 1 through 9 of this act must be registered each year with the commissioner. The commissioner shall begin taking new applications for 2019 on October 1, 2018.
(b) An eligible small employer may submit a new application for the premium incentive payments and premium assistance payments or the tax credit anytime during the year, but in order to maintain the employer's registration for the next year, the registration application must be renewed each year.
(c) The commissioner shall begin accepting renewal applications on October 1 of each year and stop accepting renewal applications on October 31 of each year.
(d) The registration application must include the number of individuals covered, as of the date of the registration application, under the small group health plan for which the employer is seeking premium incentive payments and premium assistance payments or a tax credit. If, after the initial registration, the number of individuals increases, the employer may apply to register the additional individuals, but those additional individuals may be added only at the discretion of the commissioner, who shall limit enrollment based on available funds.
(e) A small employer is not eligible to apply for premium incentive payments and premium assistance payments or a tax credit for a number of employees, or the employees' spouses or dependents, over the number that has been established in Section 6 of this act as the maximum number of employees an employer may have in order to qualify for registration for the time period in question.
(f) An employer's decision to apply for premium incentive payments and premium assistance payments or a tax credit is irrevocable for twelve (12) months or until the purchasing pool group health plan or qualified association health plan renews its registration, whichever time period is less. An employer may choose to discontinue receiving any premium incentive payments and premium assistance payments or tax credits at any time.
(2) The commissioner shall register qualifying eligible small employers in the order in which applications are received and according to whether or not the application is for premium incentive payments and premium assistance payments or a tax credit. Initially, sixty percent (60%) of the available funding must be dedicated to provide and maintain premium incentive payments and premium assistance payments for eligible small employers who have not sponsored group health plans in the previous two (2) years and who chose to join the purchasing pool or a qualified association health plan and forty percent (40%) of the available funding must be dedicated to tax credits for eligible small employers who currently sponsor a small group health plan. Funding may be transferred from the allocated fund for premium incentive payments and premium assistance payments to the general fund for tax credits if the board requests the transfer as provided in Section 4 of this act and the commissioner approves the request.
(3) (a) The maximum number of eligible small employers is reached when the anticipated amount of claims for premium incentive payments and premium assistance payments and tax credits has reached ninety-five percent (95%) of the amount of money allocated for premium incentive payments and premium assistance payments and tax credits.
(b) The commissioner may establish a waiting list for applicants that are otherwise qualified for registration but cannot be registered because of a lack of money or because the maximum number of eligible small employers has been reached.
(c) The commissioner shall mail to each employer registered under this section a notice of registration containing a unique registration number and indicating eligibility for either premium incentive payments and premium assistance payments or a tax credit. The commissioner shall also issue to each employer that is eligible for premium incentive payments and premium assistance payments or the tax credit a certificate, placard, sticker, or other evidence of participation that may be publicly posted.
(d) The commissioner shall notify all persons who applied for registration and who were not accepted that they were not registered and the reason that they were not registered.
(4) A prospective participant shall apply for registration on a form provided by the commissioner. The prospective participant shall:
(a) Provide the number of employees and whether the employer qualifies under Section 6 of this act;
(b) Provide information that is necessary to estimate the amount of the premium incentive payments and premium assistance payments payable to the applicant or the amount of the tax credit available to the applicant, such as the ages of employees or dependents, relationships of employees' dependents, and information required by the Division of Medicaid for determination of eligibility for premium assistance payments matched by federal funds;
(c) Indicate whether the prospective employer intends to pursue the claim as a tax credit through the income tax process or through premium incentive payments and premium assistance payments to be applied toward purchasing pool or eligible qualified association health plan coverage;
(d) Indicate whether or not the employer previously sponsored a group health plan and, if so, when and for how long; and
(e) Provide any additional information determined by the commissioner to be necessary to support an application.
(5) Each year, small employer participants shall reregister with the commissioner in order to determine the participant's continued eligibility.
(6) The commissioner shall transmit to the Department of Revenue, at least annually, a list of eligible small employers that are taxpayers entitled to the tax credit and shall specify the taxpayer's name and tax identification number, the tax year to which the credit applies, the amount of the credit, and whether the credit is to be applied against taxes due on the taxpayer's return or paid as premium incentive payments or premium assistance payments. Unless there has been a finding of fraud or misrepresentation on the part of the taxpayer regarding issues relating to eligibility for the tax credit, the Department of Revenue may not redetermine or change the commissioner's determination regarding the taxpayer's entitlement to and amount of the tax credit.
(7) If the Division of Medicaid receives approval for a Section 1115 waiver as provided in Section 10 of this act, the commissioner shall work with the Division of Medicaid with regard to eligibility determinations as required by federal law or waiver conditions.
SECTION 9. (1) The commissioner may, after providing an opportunity for a hearing pursuant to applicable law, impose up to a Twenty-five Thousand Dollars ($25,000.00) fine, not to exceed Five Thousand Dollars ($5,000.00) per violation upon insurance producers and adjusters, for violations of Sections 1 through 9 of this act. Failure to pay a fine under this section results in a lien upon the assets and property of that person in this state and may be recovered by suit by the commissioner and deposited in the special fund created in Section 14 of this act.
(2) In addition to any penalty that the commissioner may impose provided for in applicable law, the commissioner may require a person violating Sections 1 through 9 of this act to make full restitution to the state, including interest of ten percent (10%) a year from the date of loss, if a violation of Sections 1 through 9 of this act caused a premium incentive payment or premium assistance payment to be paid or a tax credit to be issued to a person who was not entitled to it.
(3) A person who purposely or knowingly violates Sections 1 through 9 of this act and receives a premium incentive payment or premium assistance payment or tax credit that the person is not entitled to commits the offense of larceny, which is punishable as provided in Sections 97-17-41 and 97-17-43.
(4) A person who purposely or knowingly violates Sections 1 through 9 of this act and makes false statements, knowing those statements are not true, commits the offense of false representation to defraud the government, which is punishable as provided in Section 97-7-10.
(5) Any fines or restitution collected pursuant to this section must be deposited in the special fund created in Section 14 of this act and dedicated to the payment of premium incentive payments and premium assistance payments or tax credits or funding new programs to assist eligible small employers with the cost of providing health insurance benefits.
SECTION 10. (1) It is the intent of the Legislature that the small business health insurance pool board of directors, established in Section 3 of this act, consider the option of funding a portion of the premium incentive payments on behalf of eligible small employers or premium assistance payments on behalf of eligible employees under Sections 1 through 9 of this act to the extent possible through a Section 1115 waiver demonstration project of Medicaid coverage as authorized by Section 1115 of Title Xl of the Social Security Act, 42 USCS 1315.
(2) The department shall prepare an analysis of the Section 1115 waiver for the board for its consideration in deciding whether to request that the department seek the Section 1115 waiver as provided in Section 4 of this act.
(3) (a) The department, as the designated single state agency for the receipt of Medicaid, may seek, if requested by the board, approval from the United States Department of Health and Human Services for inclusion in a Section 1115 waiver for the premium incentive payments and premium assistance payments to be provided on behalf of employees eligible under Sections 1 through 9 of this act who meet the applicable income standard established through the Section 1115 waiver.
(b) The commissioner and the board shall cooperate with the department in obtaining approval for the inclusion of the premium assistance payment coverage group in a Section 1115 waiver.
(4) Upon approval of a premium assistance payment coverage group through a Section 1115 waiver:
(a) The eligibility of program participants for the Section 1115 demonstration premium assistance coverage group must be determined by the department. The commissioner shall provide employee and other information to the department as necessary for Section 1115 waiver eligibility determinations.
(b) The department may access confidential employee and employer information necessary for administration of the premium assistance payment coverage group. The commissioner shall provide employee, employer, and other information to the department as necessary for the administration of the Section 1115 waiver.
(c) The commissioner and the board shall provide to the department the funds or certification necessary to provide the state match for the Medicaid money to be expended on behalf of the Section 1115 waiver premium incentive payment or premium assistance payment coverage groups and for the administration of the coverage groups by the department.
(d) The commissioner, the board, and the department shall cooperate in the adoption of administrative rules necessary for the implementation of the premium incentive payments and premium assistance payments. The department shall adopt rules for the implementation of Medicaid coverage for employees participating in the program as provided in the conditions for the waiver.
(e) The commissioner and the board shall cooperate with the department to ensure that expenditures of Medicaid money are made in accordance with the requirements of federal law and the approval for the Section 1115 waiver.
(5) The department may coordinate or include the authorization to seek the waiver granted by this section with any other authority granted to the department in this part to seek Section 1115 waivers.
SECTION 11. (1) There is a tax credit, determined under Sections 1 through 9 of this act, for eligible small employers who are individuals against the taxes imposed in Chapter 7, Title 27, Mississippi Code of 1972, for qualifying premiums paid by the eligible small employer for coverage of eligible employees and eligible employees' spouses and dependents under a group health plan as defined in Section 2 of this act.
(2) If the employer is an S corporation, the shareholders may claim a pro rata share of the tax credit. If the employer is a partnership, the credit may be claimed by the partners in the same proportion used to report the partnership's income or loss for Mississippi income tax purposes.
SECTION 12. There is a tax credit, as determined under Sections 1 through 9 of this act, for eligible small employers against the taxes imposed in Chapter 7, Title 27, Mississippi Code of 1972, for qualifying premiums paid by the eligible small employer for coverage of eligible employees and eligible employees' spouses and dependents under a group health plan as defined in Section 2 of this act.
SECTION 13. The small business health insurance purchasing pool may be formed solely for the purpose of obtaining health insurance upon compliance with the following provisions:
(1) (a) It contains at least fifty-one (51) eligible employees.
(b) It establishes requirements for membership. The small business health insurance purchasing pool shall accept for membership any small employers and may accept for membership any employers with at least fifty-one (51) eligible employees that otherwise meet the requirements for membership. However, the small business health insurance purchasing pool may not exclude any small employers that otherwise meet the requirements for membership on the basis of claim experience, occupation, or health status.
(c) It holds an open enrollment period at least once a year during which new members can join the small business health insurance purchasing pool.
(d) It offers coverage to eligible employees of member employers and to the employees' dependents. Coverage may not be limited to certain employees of member small employers except such a health benefit plan may exclude coverage for late enrollees for eighteen (18) months or for an eighteen-month preexisting condition exclusion, provided that if both a period of exclusion from coverage and a preexisting condition exclusion are applicable to a late enrollee, the combined period may not exceed eighteen (18) months from the date on which the individual enrolls for coverage under the health benefit plan.
(e) It does not assume any risk or form self-insurance plans among its members.
(f) (i) Disability insurance policies, certificates, or contracts offered through the small business health insurance purchasing pool must rate the entire purchasing pool group as a whole and charge each insured person based on a community rate within the common group, adjusted for case characteristics as permitted by the laws governing group disability insurance.
(ii) At its discretion, premiums may be paid to the disability insurance policies, certificates, or contracts by the small business health insurance purchasing pool or by member employers.
(g) A person marketing disability insurance policies, certificates, or contracts for the small business health insurance purchasing pool must be licensed as an insurance producer.
(2) (a) Except as provided in paragraph (d) of this subsection, on March 1 of each year, the small business health insurance purchasing pool shall provide a report and financial statement for the previous calendar year to the commissioner so that the commissioner may determine:
(i) Whether the operation of the small business health insurance purchasing pool is fiscally sound;
(ii) Whether the small business health insurance purchasing pool is bearing any risk; and
(iii) The number of individuals covered.
(b) The annual report of the small business health insurance purchasing pool must disclose its total administrative cost.
(c) The small business health insurance purchasing pool may choose to operate on a fiscal year other than on the calendar year. If the small business health insurance purchasing pool establishes a fiscal year that is other than the calendar year, it shall provide the report required in paragraph (a) of this subsection to the commissioner within sixty (60) days of the small business health insurance purchasing pool's fiscal year end.
(d) The commissioner may exempt the small business health insurance purchasing pool established in this act from the reporting requirements under paragraph (a) of this subsection.
(3) (a) All insurance or premiums collected by the small business health insurance purchasing pool on behalf of or for an insurer and all return premiums received from the insurer are held by the small business health insurance purchasing pool in a fiduciary capacity. These funds must be remitted immediately to the person entitled to them or must be deposited promptly in a fiduciary bank account established and maintained by the administrator of the small business health insurance purchasing pool. If deposited charges or premiums are collected on behalf of or for more than one (1) insurer, the small business health insurance purchasing pool shall either keep or require the bank in which the fiduciary account is maintained to keep records clearly recording the deposits to and withdrawals from the account on behalf of each insurer. The small business health insurance purchasing pool shall promptly obtain and keep copies of all these records and shall, upon request of an insurer, furnish the insurer with copies of the records pertaining to deposits and withdrawals on behalf of or for the insurer.
(b) The small business health insurance purchasing pool may not pay a claim by withdrawals from the fiduciary account. Withdrawals from the fiduciary account must be made, as provided in the written agreement between the small business health insurance purchasing pool and the insurer, for:
(i) Remittance to an insurer entitled to the remittance;
(ii) Deposit in an account maintained in the name of the insurer;
(iii) Payment to a group policyholder for remittance to the insurer entitled to the payment; or
(iv) Remittance of return premiums to the person entitled to the premium.
SECTION 14. (1) There is created in the State Treasury a special fund that is made up of all monies deposited into the fund. This account is to be administered by the Division of Medicaid.
(2) This account may be used only to provide funding for:
(a) New programs to assist eligible small employers with the costs of providing health insurance benefits to eligible employees;
(b) The cost of administering the tax credit, the purchasing pool and the premium incentive payments and premium assistance payments, as provided in Sections 1 through 9 of this act, not to exceed Six Hundred Dollars ($600.00) in the first year or five percent (5%) for each successive year of the appropriation for the tax credit, the purchasing pool, and the premium incentive payments and premium assistance payments; and
(c) To provide a state match for the Medicaid program for premium incentive payments or premium assistance to the extent that a waiver is granted by federal law as provided in Section 10 of this act.
(3) (a) The money appropriated for fiscal year 2018 for the program in subsection (2) of this section may not be expended until the Office of Budget and Program Planning has certified that Twenty-five Million Dollars ($25,000,000.00) has been deposited in the account provided for in this section.
(b) For each succeeding fiscal year, on or before July 1, the Joint Legislative Budget Committee shall calculate a balance required to sustain the program for each fiscal year of the next biennium. If the Joint Legislative Budget Committee certifies that the reserve balance will be sufficient, then the commissioner may expend the revenue for the program as appropriated. If the Joint Legislative Budget Committee determines that the reserve balance of the revenue will not support the level of appropriation, the budget director shall notify the commissioner. Upon receipt of the notification, the commissioner shall adjust the operating budget for the program to reflect the available revenue as determined by the budget director.
(4) The Division of Medicaid may adopt rules and regulations necessary to implement this section.
SECTION 15. Sections 1 through 9 may not be construed to require implementation or ongoing operation of the programs in Section 14 of this act without a line item appropriation in the general appropriations bill included for that purpose.
SECTION 16. (1) (a) As a condition of transacting business in this state with small employers, each small employer carrier must have approved for issuance to small employer groups at least two (2) health benefit plans. One (1) plan must be a basic health benefit plan, and one (1) plan must be a standard health benefit plan.
(b) (i) A small employer carrier shall issue all plans marketed under Sections 1 through 9 of this act to any eligible small employer that applies for a plan and agrees to make the required premium payments and to satisfy the other reasonable provisions of the health benefit plan not inconsistent with Sections 1 through 9 of this act.
(ii) In the case of a small employer carrier that establishes more than one (1) class of business pursuant to Section 17 of this act, the small employer carrier shall maintain and offer to eligible small employers all plans marketed under Sections 1 through 9 of this act in each established class of business. A small employer carrier may apply reasonable criteria in determining whether to accept a small employer into a class of business, provided that:
1. The criteria are not intended to discourage or prevent acceptance of small employers applying for a health benefit plan;
2. The criteria are not related to the health status or claims experience of the small employers' employees;
3. The criteria are applied consistently to all small employers that apply for coverage in that class of business; and
4. The small employer carrier provides for the acceptance of all eligible small employers into one or more classes of business.
(iii) The provisions of subparagraph (ii) of this paragraph may not be applied to a class of business into which the small employer carrier is no longer enrolling new small businesses.
(c) A small employer carrier that elects not to comply with the requirements of paragraphs (a) and (b) of this subsection may continue to provide coverage under health benefit plans previously issued to small employers in this state for a period of no more than seven (7) years from October 1, 2017, if the carrier:
(i) Complies with all other applicable provisions of Sections 1 through 9 of this act, except subsections (2) through (4) of this section;
(ii) Does not amend or alter the benefits and coverages of the previously issued health benefit plans unless required to do so by law or rule; and
(iii) Complies with all applicable provisions of Public Law 104-91.
(2) (a) A small employer carrier shall, pursuant to Section 18 of this act, file the basic health benefit plans and the standard health benefit plans to be used by the small employer carrier.
(b) The commissioner may at any time, after providing notice and an opportunity for a hearing to the small employer carrier, disapprove the continued use by a small employer carrier of a basic or standard health benefit plan on the grounds that the plan does not meet the requirements of Sections 1 through 9 of this act.
(3) Health benefit plans covering small employers must comply with the following provisions:
(a) A health benefit plan may not:
(i) Because of a preexisting condition, deny, exclude, or limit benefits for a covered individual for losses incurred more than twelve (12) months following the individual's enrollment date. A health benefit plan may not define a preexisting condition exclusion more restrictively than a limitation or exclusion of benefits relating to a condition based on presence of a condition before the enrollment date coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before the enrollment date.
(ii) Use a preexisting condition exclusion more restrictive than exclusions allowed under Section 19 of this act.
(b) A health benefit plan must waive any time period applicable to a preexisting condition exclusion or limitation period with respect to particular services for the period of time that an individual was previously covered by creditable coverage that provided benefits with respect to those services if the creditable coverage was continuous to a date not more than sixty-three (63) days prior to the submission of an application for new coverage. A health benefit plan may determine waivers of time periods applicable to preexisting condition exclusions or limitations on the basis of prior coverage of benefits within each of several classes or categories as specified in regulations implementing Public Law 104-191, rather than as provided in this paragraph (b). This paragraph (b) does not preclude application of any waiting period applicable to all new enrollees under the health benefit plan.
(c) A health benefit plan may exclude coverage for late enrollees for eighteen (18) months or for an eighteen (18) month preexisting condition exclusion, provided that if both a period of exclusion from coverage and a preexisting condition exclusion are applicable to a late enrollee, the combined period may not exceed eighteen (18) months from the date on which the individual enrolls for coverage under the health benefit plan.
(d) (i) Requirements used by a small employer carrier in determining whether to provide coverage to a small employer, including requirements for minimum participation of eligible employees and minimum employer contributions, must be applied uniformly among all small employers that have the same number of eligible employees and that apply for coverage or receive coverage from the small employer carrier. For the purpose of meeting minimum participation requirements of groups of four (4) or more, a small employer carrier may not consider employees who, because they are covered under another health plan, waive coverage under the small employer's plan as part of the group of eligible employees. However, a small employer carrier may require at least two (2) eligible employees to participate in a plan.
(ii) A small employer carrier may vary the application of minimum participation requirements and minimum employer contribution requirements only by the size of the small employer group.
(e) (i) If a small employer carrier offers coverage to a small employer, the small employer carrier shall offer coverage to all of the eligible employees of a small employer and their dependents. A small employer carrier may not offer coverage only to certain individuals in a small employer group or only to part of the group, except in the case of late enrollees as provided in paragraph (c) of this subsection.
(ii) A small employer carrier may not modify a plan marketed under Sections 1 through 9 of this act with respect to a small employer or any eligible employee or dependent, through riders, endorsements, or otherwise, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the health benefit plan.
(iii) A small employer carrier shall secure a waiver of coverage from each eligible employee who declines, at the sole discretion of the eligible employee, an offer of coverage under a health benefit plan provided by the small employer. The waiver must be signed by the eligible employee and must certify that the employee was informed of the availability of coverage under the health benefit plan and of the penalties for late enrollment. The waiver may not require the eligible employee to disclose the reasons for declining coverage.
(iv) A small employer carrier may not issue coverage to a small employer if the carrier or a producer for the carrier has evidence that the small employer induced or pressured an eligible employee to decline coverage due to the health status or risk characteristics of the eligible employee or of the dependents of the eligible employee.
(4) (a) A small employer carrier may not be required to offer coverage or accept applications pursuant to subsection (1) of this section in the case of the following:
(i) To an employer whose employees do not work or reside within the small employer carrier's established geographic service area for a network plan, defined as health insurance coverage offered by a health insurance issuer under which the financing and delivery of medical care, including items and services paid for as medical care, are provided, in whole or in part, through a defined set of providers under contract with the issuer; or
(ii) Within an area where the small employer carrier reasonably anticipates and demonstrates to the satisfaction of the commissioner that it will not have the capacity within its established geographic service area to deliver service adequately to the members of a group because of its obligations to existing group policyholders and enrollees. The small employer carrier may not deny coverage under this subsection unless the small employer carrier acts uniformly without regard to claims experience or health status-related factors of employers, employees, or dependents.
(b) A small employer carrier may not be required to provide coverage to small employers pursuant to subsection (1) of this section for which the commissioner determines that the small employer carrier does not have the financial reserves necessary to underwrite additional coverage and that the small employer carrier has denied coverage of small employers uniformly throughout the state and without regard to the claims experience and health status-related factors of the applicant small employer groups. The small employer carrier exempted from providing coverage under this subsection may not offer coverage to small employer groups in this state for one hundred eighty (180) days after the date on which coverage is denied or until the small employer carrier has demonstrated to the commissioner that the small employer carrier has sufficient financial reserves to underwrite additional coverage, whichever is later.
SECTION 17. (1) A small employer carrier may establish a separate class of business only to reflect substantial differences in expected claims experience or administrative costs that are related to the following reasons:
(a) The small employer carrier uses more than one (1) type of system for the marketing and sale of health benefit plans to small employers.
(b) The small employer carrier has acquired a class of business from another small employer carrier.
(c) The small employer carrier provides coverage to one or more association groups, including labor unions, that have been organized and are maintained in good faith for purposes other than that of obtaining insurance or of insuring members, employees, or employees of members of the association for the benefit of persons other than the association or its officers or trustees. The term "employees" as used in this subsection may include retired employees.
(2) A small employer carrier may establish up to nine (9) separate classes of business under subsection (1).
(3) The commissioner shall adopt rules to provide for a period of transition in order for a small employer carrier to come into compliance with subsection (2) in the case of acquisition of an additional class of business from another small employer carrier.
(4) The commissioner may approve the establishment of additional classes of business upon application to the commissioner and a finding by the commissioner that the action would enhance the fairness and efficiency of the small employer health insurance market.
SECTION 18. (1) (a) A health benefit plan may not be delivered or issued for delivery in Mississippi unless the form has been filed with and approved by the commissioner and, if required, the regulatory official of the state of domicile of the insurer. This provision does not apply to surety bonds or policies, riders, endorsements, or forms of unique character designed for and used with relation to insurance upon a particular subject or that relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or disability insurance policies and are used at the request of the individual policyholder, contract holder, or certificate holder.
(b) A filing required by paragraph (a) of this subsection must be submitted by an officer of the insurer with a certification in a form prescribed by the commissioner. The certification must state that to the best of the officer's knowledge and belief, the health benefit plan complies with the applicable provisions of Title 83, Mississippi Code of 1972.
(c) The approval of a health benefit plan by the state of domicile may be waived by the commissioner if the commissioner considers the requirements of paragraph (a) of this subsection unnecessary for the protection of Mississippi insurance consumers. If the requirement is waived, an insurer shall notify the commissioner in writing within ten (10) days of disapproval, denial, or withdrawal of approval of a form by the state of domicile.
(2) (a) The filing must be made not less than sixty (60) days before delivery and must be delivered by hand or sent by certified mail with a return receipt requested. The commissioner's office shall mark a filing with the date of receipt by the commissioner's office.
(b) (i) If after sixty (60) days from the date of receipt by the commissioner's office the commissioner has not approved or disapproved the form by a notice pursuant to the provisions in subsection (4) of this section, the form is considered approved for all purposes, subject to paragraph (c) of this subsection.
(ii) The running of the sixty-day period is tolled for a period commencing on the date that the commissioner notifies the insurer of problems or questions and requests additional information from the insurer concerning a form filed pursuant to paragraph (a) of subsection (1) of this section and ending on the date that the insurer submits its response to the commissioner.
(iii) For purposes of tolling the sixty-day period as provided in subparagraph (ii) of this section, the commissioner's request notification may be made electronically.
(c) In a letter separate from the original filing and delivered by hand or sent by certified mail with return receipt requested, the insurer shall notify the commissioner, at least ten (10) days before the use of the form in the market, that the insurer believes that:
(i) The form has been or will be considered approved; and
(ii) The insurer will begin marketing the form in Mississippi.
(d) The commissioner's office shall mark a letter received pursuant to paragraph (c) of this subsection with the date of receipt by the commissioner's office.
(3) Approval of a form by the commissioner constitutes a waiver of any unexpired portion of the waiting period.
(4) The commissioner may at any time, after notice and for cause shown, withdraw any approval. Notice by the commissioner disapproving a form or withdrawing a previous approval must state the grounds for disapproval or withdrawal in sufficient detail to inform the insurer of the specific reason or reasons for and the legal authority supporting the disapproval or withdrawal of approval in whole or in part. The disapproval or withdrawal of approval does not take effect unless it is issued after the commissioner has reviewed the form and provided notice to the person who filed the form pursuant to this subsection.
(5) After the date of the insurer's receipt of notice of disapproval or withdrawal of approval by the commissioner, the insurer may not deliver the form or issue the form for delivery in Mississippi.
(6) The insurer may request a hearing for unresolved disputes regarding a disapproval or a withdrawal of approval by providing the commissioner with a written demand for a hearing. The written demand must specify the grounds relied upon as a basis for the relief sought at the hearing. If the commissioner does not issue an order granting a person's request for a hearing within thirty (30) days of receiving a request, the hearing is considered refused.
(7) The commissioner may exempt from the requirements of this section, for so long as the commissioner considers proper, an insurance document, form, or type of document or form to which, in the commissioner's opinion, this section may not practicably be applied or the filing and approval of which are not desirable or necessary for the protection of the public.
(8) This section applies to a form used by a domestic insurer for delivery in a jurisdiction outside Mississippi if the insurance supervisory official of the jurisdiction informs the commissioner that the form is not subject to approval or disapproval by the official and upon the commissioner's order requiring the form to be submitted to the commissioner for the purpose. The same standards apply to these forms as apply to forms for domestic use.
(9) This section does not apply to:
(a) Reinsurance;
(b) Policies or contracts not issued for delivery in Mississippi or delivered in Mississippi, except as provided in subsection (8); and
(c) Ocean marine and foreign trade insurances.
(10) Except as otherwise provided by law, group certificates that are delivered or issued for delivery in Mississippi for group insurance policies effectuated and delivered outside Mississippi but covering persons who are residents in Mississippi must be filed with the commissioner upon request. The certificates must meet the minimum provisions mandated by Mississippi if Mississippi law prevails over conflicting provisions of other state law.
SECTION 19. (1) In addition to the provisions of Section 83-9-49, a health benefit plan may not exclude coverage for a preexisting condition unless:
(a) Medical advice, diagnosis, care, or treatment was recommended or received by the participant or beneficiary within the six-month period ending on the enrollment date;
(b) Exclusion of coverage extends for a period of not more than twelve (12) months or eighteen (18) months in the case of a late enrollee; and
(c) The period of the preexisting condition exclusion is reduced by the aggregate of the periods of creditable coverage applicable to the participant or beneficiary as of the enrollment date.
(2) Genetic information may not be excluded as a preexisting condition in the absence of a diagnosis of the condition related to the genetic information.
(3) Pregnancy may not be excluded as a preexisting condition.
SECTION 20. Section 27-7-15, Mississippi Code of 1972, is brought forward as follows:
27-7-15. (1) For the purposes of this article, except as otherwise provided, the term "gross income" means and includes the income of a taxpayer derived from salaries, wages, fees or compensation for service, of whatever kind and in whatever form paid, including income from governmental agencies and subdivisions thereof; or from professions, vocations, trades, businesses, commerce or sales, or renting or dealing in property, or reacquired property; also from annuities, interest, rents, dividends, securities, insurance premiums, reinsurance premiums, considerations for supplemental insurance contracts, or the transaction of any business carried on for gain or profit, or gains, or profits, and income derived from any source whatever and in whatever form paid. The amount of all such items of income shall be included in the gross income for the taxable year in which received by the taxpayer. The amount by which an eligible employee's salary is reduced pursuant to a salary reduction agreement authorized under Section 25-17-5 shall be excluded from the term "gross income" within the meaning of this article.
(2) In determining gross income for the purpose of this section, the following, under regulations prescribed by the commissioner, shall be applicable:
(a) Dealers in property. Federal rules, regulations and revenue procedures shall be followed with respect to installment sales unless a transaction results in the shifting of income from inside the state to outside the state.
(b) Casual sales of property.
(i) Prior to January 1, 2001, federal rules, regulations and revenue procedures shall be followed with respect to installment sales except they shall be applied and administered as if H.R. 3594, the Installment Tax Correction Act of 2000 of the 106th Congress, had not been enacted. This provision will generally affect taxpayers, reporting on the accrual method of accounting, entering into installment note agreements on or after December 17, 1999. Any gain or profit resulting from the casual sale of property will be recognized in the year of sale.
(ii) From and after January 1, 2001, federal rules, regulations and revenue procedures shall be followed with respect to installment sales except as provided in this subparagraph (ii). Gain or profit from the casual sale of property shall be recognized in the year of sale. When a taxpayer recognizes gain on the casual sale of property in which the gain is deferred for federal income tax purposes, a taxpayer may elect to defer the payment of tax resulting from the gain as allowed and to the extent provided under regulations prescribed by the commissioner. If the payment of the tax is made on a deferred basis, the tax shall be computed based on the applicable rate for the income reported in the year the payment is made. Except as otherwise provided in subparagraph (iii) of this paragraph (b), deferring the payment of the tax shall not affect the liability for the tax. If at any time the installment note is sold, contributed, transferred or disposed of in any manner and for any purpose by the original note holder, or the original note holder is merged, liquidated, dissolved or withdrawn from this state, then all deferred tax payments under this section shall immediately become due and payable.
(iii) If the selling price of the property is reduced by any alteration in the terms of an installment note, including default by the purchaser, the gain to be recognized is recomputed based on the adjusted selling price in the same manner as for federal income tax purposes. The tax on this amount, less the previously paid tax on the recognized gain, is payable over the period of the remaining installments. If the tax on the previously recognized gain has been paid in full to this state, the return on which the payment was made may be amended for this purpose only. The statute of limitations in Section 27-7-49 shall not bar an amended return for this purpose.
(c) Reserves of insurance companies. In the case of insurance companies, any amounts in excess of the legally required reserves shall be included as gross income.
(d) Affiliated companies or persons. As regards sales, exchanges or payments for services from one to another of affiliated companies or persons or under other circumstances where the relation between the buyer and seller is such that gross proceeds from the sale or the value of the exchange or the payment for services are not indicative of the true value of the subject matter of the sale, exchange or payment for services, the commissioner shall prescribe uniform and equitable rules for determining the true value of the gross income, gross sales, exchanges or payment for services, or require consolidated returns of affiliates.
(e) Alimony and separate maintenance payments. The federal rules, regulations and revenue procedures in determining the deductibility and taxability of alimony payments shall be followed in this state.
(f) Reimbursement for expenses of moving. There shall be included in gross income (as compensation for services) any amount received or accrued, directly or indirectly, by an individual as a payment for or reimbursement of expenses of moving from one (1) residence to another residence which is attributable to employment or self-employment.
(3) In the case of taxpayers other than residents, gross income includes gross income from sources within this state.
(4) The words "gross income" do not include the following items of income which shall be exempt from taxation under this article:
(a) The proceeds of life insurance policies and contracts paid upon the death of the insured. However, the income from the proceeds of such policies or contracts shall be included in the gross income.
(b) The amount received by the insured as a return of premium or premiums paid by him under life insurance policies, endowment, or annuity contracts, either during the term or at maturity or upon surrender of the contract.
(c) The value of property acquired by gift, bequest, devise or descent, but the income from such property shall be included in the gross income.
(d) Interest upon the obligations of the United States or its possessions, or securities issued under the provisions of the Federal Farm Loan Act of 1916, or bonds issued by the War Finance Corporation, or obligations of the State of Mississippi or political subdivisions thereof.
(e) The amounts received through accident or health insurance as compensation for personal injuries or sickness, plus the amount of any damages received for such injuries or such sickness or injuries, or through the War Risk Insurance Act, or any law for the benefit or relief of injured or disabled members of the military or naval forces of the United States.
(f) Income received by any religious denomination or by any institution or trust for moral or mental improvements, religious, Bible, tract, charitable, benevolent, fraternal, missionary, hospital, infirmary, educational, scientific, literary, library, patriotic, historical or cemetery purposes or for two (2) or more of such purposes, if such income be used exclusively for carrying out one or more of such purposes.
(g) Income received by a domestic corporation which is "taxable in another state" as this term is defined in this article, derived from business activity conducted outside this state. Domestic corporations taxable both within and without the state shall determine Mississippi income on the same basis as provided for foreign corporations under the provisions of this article.
(h) In case of insurance companies, there shall be excluded from gross income such portion of actual premiums received from an individual policyholder as is paid back or credited to or treated as an abatement of premiums of such policyholder within the taxable year.
(i) Income from dividends that has already borne a tax as dividend income under the provisions of this article, when such dividends may be specifically identified in the possession of the recipient.
(j) Amounts paid by the United States to a person as added compensation for hazardous duty pay as a member of the Armed Forces of the United States in a combat zone designated by Executive Order of the President of the United States.
(k) Amounts received as retirement allowances, pensions, annuities or optional retirement allowances paid under the federal Social Security Act, the Railroad Retirement Act, the Federal Civil Service Retirement Act, or any other retirement system of the United States government, retirement allowances paid under the Mississippi Public Employees' Retirement System, Mississippi Highway Safety Patrol Retirement System or any other retirement system of the State of Mississippi or any political subdivision thereof. The exemption allowed under this paragraph (k) shall be available to the spouse or other beneficiary at the death of the primary retiree.
(l) Amounts received as retirement allowances, pensions, annuities or optional retirement allowances paid by any public or governmental retirement system not designated in paragraph (k) or any private retirement system or plan of which the recipient was a member at any time during the period of his employment. Amounts received as a distribution under a Roth Individual Retirement Account shall be treated in the same manner as provided under the Internal Revenue Code of 1986, as amended. The exemption allowed under this paragraph (l) shall be available to the spouse or other beneficiary at the death of the primary retiree.
(m) National Guard or Reserve Forces of the United States compensation not to exceed the aggregate sum of Five Thousand Dollars ($5,000.00) for any taxable year through the 2005 taxable year, and not to exceed the aggregate sum of Fifteen Thousand Dollars ($15,000.00) for any taxable year thereafter.
(n) Compensation received for active service as a member below the grade of commissioned officer and so much of the compensation as does not exceed the maximum enlisted amount received for active service as a commissioned officer in the Armed Forces of the United States for any month during any part of which such members of the Armed Forces (i) served in a combat zone as designated by Executive Order of the President of the United States or a qualified hazardous duty area as defined by federal law, or both; or (ii) was hospitalized as a result of wounds, disease or injury incurred while serving in such combat zone. For the purposes of this paragraph (n), the term "maximum enlisted amount" means and has the same definition as that term has in 26 USCS 112.
(o) The proceeds received from federal and state forestry incentive programs.
(p) The amount representing the difference between the increase of gross income derived from sales for export outside the United States as compared to the preceding tax year wherein gross income from export sales was highest, and the net increase in expenses attributable to such increased exports. In the absence of direct accounting, the ratio of net profits to total sales may be applied to the increase in export sales. This paragraph (p) shall only apply to businesses located in this state engaging in the international export of Mississippi goods and services. Such goods or services shall have at least fifty percent (50%) of value added at a location in Mississippi.
(q) Amounts paid by the federal government for the construction of soil conservation systems as required by a conservation plan adopted pursuant to 16 USCS 3801 et seq.
(r) The amount deposited in a medical savings account, and any interest accrued thereon, that is a part of a medical savings account program as specified in the Medical Savings Account Act under Sections 71-9-1 through 71-9-9; provided, however, that any amount withdrawn from such account for purposes other than paying eligible medical expense or to procure health coverage shall be included in gross income.
(s) Amounts paid by the Mississippi Soil and Water Conservation Commission from the Mississippi Soil and Water Cost-Share Program for the installation of water quality best management practices.
(t) Dividends received by a holding corporation, as defined in Section 27-13-1, from a subsidiary corporation, as defined in Section 27-13-1.
(u) Interest, dividends, gains or income of any kind on any account in the Mississippi Affordable College Savings Trust Fund, as established in Sections 37-155-101 through 37-155-125, to the extent that such amounts remain on deposit in the MACS Trust Fund or are withdrawn pursuant to a qualified withdrawal, as defined in Section 37-155-105.
(v) Interest, dividends or gains accruing on the payments made pursuant to a prepaid tuition contract, as provided for in Section 37-155-17.
(w) Income resulting from transactions with a related member where the related member subject to tax under this chapter was required to, and did in fact, add back the expense of such transactions as required by Section 27-7-17(2). Under no circumstances may the exclusion from income exceed the deduction add-back of the related member, nor shall the exclusion apply to any income otherwise excluded under this chapter.
(x) Amounts that are subject to the tax levied pursuant to Section 27-7-901, and are paid to patrons by gaming establishments licensed under the Mississippi Gaming Control Act.
(y) Amounts that are subject to the tax levied pursuant to Section 27-7-903, and are paid to patrons by gaming establishments not licensed under the Mississippi Gaming Control Act.
(z) Interest, dividends, gains or income of any kind on any account in a qualified tuition program and amounts received as distributions under a qualified tuition program shall be treated in the same manner as provided under the United States Internal Revenue Code, as amended. For the purposes of this paragraph (z), the term "qualified tuition program" means and has the same definition as that term has in 26 USCS 529.
(aa) The amount deposited in a health savings account, and any interest accrued thereon, that is a part of a health savings account program as specified in the Health Savings Accounts Act created in Sections 83-62-1 through 83-62-9; however, any amount withdrawn from such account for purposes other than paying qualified medical expenses or to procure health coverage shall be included in gross income, except as otherwise provided by Sections 83-62-7 and 83-62-9.
(bb) Amounts received as qualified disaster relief payments shall be treated in the same manner as provided under the United States Internal Revenue Code, as amended.
(cc) Amounts received as a "qualified Hurricane Katrina distribution" as defined in the United States Internal Revenue Code, as amended.
(dd) Amounts received by an individual which may be excluded from income as foreign earned income for federal income tax purposes.
(ee) Amounts received by a qualified individual, directly or indirectly, from an employer or nonprofit housing organization that are qualified housing expenses associated with an employer-assisted housing program. For purposes of this paragraph (ee):
(i) "Qualified individual" means any individual whose household income does not exceed one hundred twenty percent (120%) of the area median gross income (as defined by the United States Department of Housing and Urban Development), adjusted for household size, for the area in which the housing is located.
(ii) "Nonprofit housing organization" means an organization that is organized as a not-for-profit organization under the laws of this state or another state and has as one of its purposes:
1. Homeownership education or counseling;
2. The development of affordable housing; or
3. The development or administration of employer-assisted housing programs.
(iii) "Employer-assisted housing program" means a separate written plan of any employer (including, without limitation, tax-exempt organizations and public employers) for the exclusive benefit of the employer's employees to pay qualified housing expenses to assist the employer's employees in securing affordable housing.
(iv) "Qualified housing expenses" means:
1. With respect to rental assistance, an amount not to exceed Two Thousand Dollars ($2,000.00) paid for the purpose of assisting employees with security deposits and rental subsidies; and
2. With respect to homeownership assistance, an amount not to exceed the lesser of Ten Thousand Dollars ($10,000.00) or six percent (6%) of the purchase price of the employee's principal residence that is paid for the purpose of assisting employees with down payments, payment of closing costs, reduced interest mortgages, mortgage guarantee programs, mortgage forgiveness programs, equity contribution programs, or contributions to homebuyer education and/or homeownership counseling of eligible employees.
(ff) For the 2010 taxable year and any taxable year thereafter, amounts converted in accordance with the United States Internal Revenue Code, as amended, from a traditional Individual Retirement Account to a Roth Individual Retirement Account. The exemption allowed under this paragraph (ff) shall be available to the spouse or other beneficiary at the death of the primary retiree.
(gg) Amounts received for the performance of disaster or emergency-related work as defined in Section 27-113-5.
(hh) The amount deposited in a catastrophe savings account established under Sections 27-7-1001 through 27-7-1007, interest income earned on the catastrophe savings account, and distributions from the catastrophe savings account; however, any amount withdrawn from a catastrophe savings account for purposes other than paying qualified catastrophe expenses shall be included in gross income, except as otherwise provided by Sections 27-7-1001 through 27-7-1007.
(ii) Interest, dividends, gains or income of any kind on any account in the Mississippi Achieving a Better Life Experience (ABLE) Trust Fund, as established in Chapter 28, Title 43, to the extent that such amounts remain on deposit in the ABLE Trust Fund or are withdrawn pursuant to a qualified withdrawal, as defined in Section 43-28-11.
(jj) Subject to the limitations provided under Section 27-7-1103, amounts deposited into a first-time homebuyer savings account and any interest or other income earned attributable to an account and monies or funds withdrawn or distributed from an account for the payment of eligible costs by or on behalf of a qualified beneficiary; however, any monies or funds withdrawn or distributed from a first-time homebuyer savings account for any purpose other than the payment of eligible costs by or on behalf of a qualified beneficiary shall be included in gross income. For the purpose of this paragraph (jj), the terms "first-time homebuyer savings account," "eligible costs" and "qualified beneficiary" mean and have the same definitions as such terms have in Section 27-7-1101.
(5) Prisoners of war, missing in action-taxable status.
(a) Members of the Armed Forces. Gross income does not include compensation received for active service as a member of the Armed Forces of the United States for any month during any part of which such member is in a missing status, as defined in paragraph (d) of this subsection, during the Vietnam Conflict as a result of such conflict.
(b) Civilian employees. Gross income does not include compensation received for active service as an employee for any month during any part of which such employee is in a missing status during the Vietnam Conflict as a result of such conflict.
(c) Period of conflict. For the purpose of this subsection, the Vietnam Conflict began February 28, 1961, and ends on the date designated by the President by Executive Order as the date of the termination of combatant activities in Vietnam. For the purpose of this subsection, an individual is in a missing status as a result of the Vietnam Conflict if immediately before such status began he was performing service in Vietnam or was performing service in Southeast Asia in direct support of military operations in Vietnam. "Southeast Asia," as used in this paragraph, is defined to include Cambodia, Laos, Thailand and waters adjacent thereto.
(d) "Missing status" means the status of an employee or member of the Armed Forces who is in active service and is officially carried or determined to be absent in a status of (i) missing; (ii) missing in action; (iii) interned in a foreign country; (iv) captured, beleaguered or besieged by a hostile force; or (v) detained in a foreign country against his will; but does not include the status of an employee or member of the Armed Forces for a period during which he is officially determined to be absent from his post of duty without authority.
(e) "Active service" means active federal service by an employee or member of the Armed Forces of the United States in an active duty status.
(f) "Employee" means one who is a citizen or national of the United States or an alien admitted to the United States for permanent residence and is a resident of the State of Mississippi and is employed in or under a federal executive agency or department of the Armed Forces.
(g) "Compensation" means (i) basic pay; (ii) special pay; (iii) incentive pay; (iv) basic allowance for quarters; (v) basic allowance for subsistence; and (vi) station per diem allowances for not more than ninety (90) days.
(h) If refund or credit of any overpayment of tax for any taxable year resulting from the application of this subsection (5) is prevented by the operation of any law or rule of law, such refund or credit of such overpayment of tax may, nevertheless, be made or allowed if claim therefor is filed with the Department of Revenue within three (3) years after the date of the enactment of this subsection.
(i) The provisions of this subsection shall be effective for taxable years ending on or after February 28, 1961.
(6) A shareholder of an S corporation, as defined in Section 27-8-3(1)(g), shall take into account the income, loss, deduction or credit of the S corporation only to the extent provided in Section 27-8-7(2).
SECTION 21. Section 27-69-13, Mississippi Code of 1972, is brought forward as follows:
27-69-13. There is hereby imposed, levied and assessed, to be collected and paid as hereinafter provided in this chapter, an excise tax on each person or dealer in cigarettes, cigars, stogies, snuff, chewing tobacco, and smoking tobacco, or substitutes therefor, upon the sale, use, consumption, handling or distribution in the State of Mississippi, as follows:
(a) On cigarettes, the rate of tax shall be Three and Four-tenths Cents (3.4¢) on each cigarette sold with a maximum length of one hundred twenty (120) millimeters; any cigarette in excess of this length shall be taxed as if it were two (2) or more cigarettes. Provided, however, if the federal tax rate on cigarettes in effect on June 1, 1985, is reduced, then the rate as provided herein shall be increased by the amount of the federal tax reduction. Such tax increase shall take effect on the first day of the month following the effective date of such reduction in the federal tax rate.
(b) On cigars, cheroots, stogies, snuff, chewing and smoking tobacco and all other tobacco products except cigarettes, the rate of tax shall be fifteen percent (15%) of the manufacturer's list price.
No stamp evidencing the tax herein levied on cigarettes shall be of a denomination of less than One Cent (1¢), and whenever the tax computed at the rates herein prescribed on cigarettes shall be a specified amount, plus a fractional part of One Cent (1¢), the package shall be stamped for the next full cent; however, the additional face value of stamps purchased to comply with taxes imposed by this section after June 1, 1985, shall be subject to a four percent (4%) discount or compensation to dealers for their services rather than the eight percent (8%) discount or compensation allowed by Section 27-69-31.
Every wholesaler shall purchase stamps as provided in this chapter, and affix the same to all packages of cigarettes handled by him as herein provided.
The above tax is levied upon the sale, use, gift, possession or consumption of tobacco within the State of Mississippi, and the impact of the tax levied by this chapter is hereby declared to be on the vendee, user, consumer or possessor of tobacco in this state; and when said tax is paid by any other person, such payment shall be considered as an advance payment and shall thereafter be added to the price of the tobacco and recovered from the ultimate consumer or user.
SECTION 22. Section 27-69-75, Mississippi Code of 1972, is brought forward as follows:
27-69-75. All taxes levied by this chapter shall be payable to the commissioner in cash, or by personal check, cashier's check, bank exchange, post office money order or express money order, and shall be deposited by the commissioner in the State Treasury on the same day collected. No remittance other than cash shall be a final discharge of liability for the tax herein assessed and levied, unless and until it has been paid in cash to the commissioner.
All tobacco taxes collected, including tobacco license taxes, shall be deposited into the State Treasury to the credit of the General Fund.
Wholesalers who are entitled to purchase stamps at a discount, as provided by Section 27-69-31, may have consigned to them, without advance payment, such stamps, if and when such wholesaler shall give to the commissioner a good and sufficient bond executed by some surety company authorized to do business in this state, conditioned to secure the payment for the stamps so consigned. The commissioner shall require payment for such stamps not later than thirty (30) days from the date the stamps were consigned.
SECTION 23. Section 97-17-41, Mississippi Code of 1972, is brought forward as follows:
97-17-41. (1) Any person who shall be convicted of taking and carrying away, feloniously, the personal property of another, of the value of One Thousand Dollars ($1,000.00) or more, but less than Five Thousand Dollars ($5,000.00), shall be guilty of grand larceny, and shall be imprisoned in the Penitentiary for a term not exceeding five (5) years; or shall be fined not more than Ten Thousand Dollars ($10,000.00), or both. The total value of property taken and carried away by the person from a single victim shall be aggregated in determining the gravity of the offense.
(2) Any person who shall be convicted of taking and carrying away, feloniously, the personal property of another, of the value of Five Thousand Dollars ($5,000.00) or more, but less than Twenty-five Thousand Dollars ($25,000.00), shall be guilty of grand larceny, and shall be imprisoned in the Penitentiary for a term not exceeding ten (10) years; or shall be fined not more than Ten Thousand Dollars ($10,000.00), or both. The total value of property taken and carried away by the person from a single victim shall be aggregated in determining the gravity of the offense.
(3) Any person who shall be convicted of taking and carrying away, feloniously, the personal property of another, of the value of Twenty-five Thousand Dollars ($25,000.00) or more, shall be guilty of grand larceny, and shall be imprisoned in the Penitentiary for a term not exceeding twenty (20) years; or shall be fined not more than Ten Thousand Dollars ($10,000.00), or both. The total value of property taken and carried away by the person from a single victim shall be aggregated in determining the gravity of the offense.
(4) (a) Any person who shall be convicted of taking and carrying away, feloniously, the property of a church, synagogue, temple or other established place of worship, of the value of One Thousand Dollars ($1,000.00) or more, shall be guilty of grand larceny, and shall be imprisoned in the Penitentiary for a term not exceeding ten (10) years, or shall be fined not more than Ten Thousand Dollars ($10,000.00), or both.
(b) Any person who shall be convicted of taking and carrying away, feloniously, the property of a church, synagogue, temple or other established place of worship, of the value of Twenty-five Thousand Dollars ($25,000.00) or more, shall be guilty of grand larceny, and shall be imprisoned in the Penitentiary for a term not exceeding twenty (20) years, or shall be fined not more than Ten Thousand Dollars ($10,000.00), or both. The total value of property taken and carried away by the person from a single victim shall be aggregated in determining the gravity of the offense.
SECTION 24. Section 97-17-43, Mississippi Code of 1972, is brought forward as follows:
97-17-43. (1) If any person shall feloniously take, steal and carry away any personal property of another under the value of One Thousand Dollars ($1,000.00), he shall be guilty of petit larceny and, upon conviction, may be punished by imprisonment in the county jail not exceeding six (6) months or by a fine not exceeding One Thousand Dollars ($1,000.00), or both, if the court finds substantial and compelling reasons why the offender cannot be safely and effectively supervised in the community, is not amenable to community-based treatment, or poses a significant risk to public safety. If such a finding is not made, the court shall suspend the sentence of imprisonment and impose a period of probation not exceeding one (1) year or a fine not exceeding One Thousand Dollars ($1,000.00), or both. The total value of property taken, stolen or carried away by the person from a single victim shall be aggregated in determining the gravity of the offense. Any person convicted of a third or subsequent offense under this section where the value of the property is not less than Five Hundred Dollars ($500.00), shall be imprisoned in the Penitentiary for a term not exceeding three (3) years or fined an amount not exceeding One Thousand Dollars ($1,000.00), or both.
(2) If any person shall feloniously take, steal and carry away any property of a church, synagogue, temple or other established place of worship under the value of One Thousand Dollars ($1,000.00), he shall be guilty of petit larceny and, upon conviction, may be punished by imprisonment in the county jail not exceeding one (1) year or by fine not exceeding Two Thousand Dollars ($2,000.00), or both if the court finds substantial and compelling reasons why the offender cannot be safely and effectively supervised in the community, is not amenable to community-based treatment, or poses a significant risk to public safety. If such a finding is not made, the court shall suspend the sentence of imprisonment and impose a period of probation not exceeding one (1) year or a fine not exceeding Two Thousand Dollars ($2,000.00), or both. Any person convicted of a third or subsequent offense under this section where the value of the property is not less than Five Hundred Dollars ($500.00), shall be imprisoned in the Penitentiary for a term not exceeding three (3) years or fined an amount not exceeding Two Thousand Dollars ($2,000.00), or both.
(3) Any person who leaves the premises of an establishment at which motor fuel offered for retail sale was dispensed into the fuel tank of a motor vehicle by driving away in that motor vehicle without having made due payment or authorized charge for the motor fuel so dispensed, with intent to defraud the retail establishment, shall be guilty of petit larceny and punished as provided in subsection (1) of this section and, upon any second or subsequent such offense, the driver's license of the person shall be suspended as follows:
(a) The person shall submit the driver's license to the court upon conviction and the court shall forward the driver's license to the Department of Public Safety.
(b) The first suspension of a driver's license under this subsection shall be for a period of six (6) months.
(c) A second or subsequent suspension of a driver's license under this subsection shall be for a period of one (1) year.
(d) At the expiration of the suspension period, and upon payment of a restoration fee of Twenty-five Dollars ($25.00), the suspension shall terminate and the Department of Public Safety shall return the person's driver's license to the person. The restoration fee shall be in addition to the fees provided for in Title 63, Chapter 1, and shall be deposited into the State General Fund in accordance with Section 45-1-23.
SECTION 25. This act shall take effect and be in force from and after July 1, 2018.