MISSISSIPPI LEGISLATURE
2020 Regular Session
To: Interstate Cooperation; Insurance
By: Representatives Arnold, Miles
AN ACT TO AUTHORIZE THE STATE OF MISSISSIPPI TO ENTER INTO AN INTERSTATE COMPACT WITH SOUTHERN STATES FOR THE PURPOSE OF EXPANDING MARKET ACCESS TO HEALTH INSURANCE BY AUTHORIZING RECIPROCITY WITH COMPACTING STATES FOR THE SALE OF INDIVIDUAL ACCIDENT AND HEALTH INSURANCE POLICIES ACROSS STATE LINES; TO PRESCRIBE THE MINIMUM STANDARDS FOR SUCH POLICIES; TO ESTABLISH THE INTERSTATE COMMISSION ON HEALTH INSURANCE MARKET ACCESS AND PRESCRIBE ITS POWERS AND DUTIES; AND FOR RELATED PURPOSES.
SECTION 1. The following compact of the southern states for the purpose of providing reciprocity for market access to individual health insurance coverage, by authorizing insurers to offer individual accident and health insurance policies in Mississippi that have been approved for issuance in other
southern states and prescribe the minimum standards for such policies, and the same is, hereby ratified and approved:
WHEREAS, insurance firms in each state are protected from interstate competition by the federal McCarran-Ferguson Act, which grants states the right to regulate health plans within their borders; and
WHEREAS, the exemption from state regulations provided to large employers who self-insure has resulted in a patchwork of fifty different sets of state regulations and the cost for an insurer licensed in one state to enter another state market is often high; and
WHEREAS, the Affordable Care Act (ACA) set new standards, but retained the strong context of state regulation combined with expanded minimum federal standards; and
WHEREAS, a number of state legislators have been interested in whether some states allow or facilitate the purchase of individual accident and health insurance across state boundaries or from out-of-state regulated insurance companies; and
WHEREAS, the result of this interest includes enacted laws in six states, and introduction of similar efforts in at least 17 others, however none of the six enacting states are known to actually offer or sell such policies and no consumer has purchased a policy; and
WHEREAS, on October 12, 2017, President Donald Trump signed an executive order to expand the use of Association Health Plans (AHP) as a way to avoid or preempt existing state mandates, by directing the Secretary of Labor to consider expanding access to Association Health Plans (AHPs), which could potentially allow American employers to form groups across state lines; and
WHEREAS, a broader interpretation of the Employee Retirement Income Security Act (ERISA) could potentially allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees, and potentially allow employers to form AHPs through existing organizations, or create new ones for the express purpose of offering group insurance; NOW, THEREFORE,
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
COMPACT I
FINDINGS AND PURPOSE
A. The Mississippi Legislature recognizes the high level of uninsured individuals in this state and the need for individuals or other purchasers of health insurance coverage in this state to
have the opportunity to choose health insurance plans that are more affordable and flexible than existing market policies offering accident and health insurance coverage. Therefore,
the Legislature seeks to increase the availability of health insurance coverage by allowing insurers authorized to transact insurance in Mississippi to issue individual accident and sickness policies in Mississippi that is currently approved for issuance in another state.
B. For purposes of this compact, the term "individual accident and health insurance policy" means any policy insuring against loss resulting from sickness or from bodily injury or death by accident, or both, or any contract to furnish ambulance service in the future but does not include limited benefit insurance policies exempted from a health benefit policy. The term "individual accident and health insurance policy" shall also include comprehensive major medical coverage for medical and surgical benefits, and also includes "High Deductible Health Plans" sold or maintained under the applicable provisions of Section 223 of the Internal Revenue Code.
C. In consideration of the mutual agreements, covenants and obligations assumed by the respective states who are parties hereto (hereinafter referred to as "states"), the said several states do hereby form a geographical district or region consisting of the areas lying within the boundaries of the contracting states which, for the purposes of this compact, to approve for sale, in any compacting state, any individual accident and health insurance policy that is currently approved for issuance in another compacting state where the insurer or the insurer's affiliate or subsidiary is authorized to transact insurance so long as the insurer or the insurer's affiliate or subsidiary filing and issuance of such policy in Mississippi is also authorized to transact insurance in this state, and provided that any such policy meets the requirements set forth in this compact. Additionally, any insurer authorized to transact insurance in a compacting state can offer an individual accident and health insurance policy with benefits equivalent to those in any policy approved for sale in Mississippi under this compact, provided that any such offered policy meets the requirements set forth in the respective compacting state's regulatory and licensing statures.
COMPACT II
THE COMMISSION
The states do further hereby establish and create a joint commission which shall be known as the Interstate Commission on Health Insurance Market Access (hereinafter referred to as the "commission"), the members of which commission shall consist of the governor of each state, who shall serve in an ex officio capacity, and four (4) additional citizens of each state to be appointed by the governor thereof, at least one (1) of whom shall be a member of the Commission of Insurance. The governor shall continue as a member of the commission during his tenure of office as governor of the state, but the members of the commission appointed by the governor shall hold office for a period of four (4) years, except that in the original appointment one (1) commissioner so appointed by the governor shall be designated at the time of his appointment to serve an initial term of three (3) years, but thereafter his successor shall serve the full term of four (4) years. Vacancies on the commission caused by death, resignation, refusal or inability to serve, shall be filled by appointment by the governor for the unexpired portion of the term. The officers of the commission shall be a chairman, a vice chairman, a secretary, a treasurer and such additional officers as may be created by the commission from time to time.
COMPACT III
POWERS AND DUTIES OF THE COMMISSION
A. It shall be the duty of the commission to submit plans and recommendations to the states from time to time for their approval and adoption by appropriate legislative action to facilitate the purchase and regulation of individual accident and health insurance policies across state boundaries or from out-of-state regulated insurance companies, within the geographical limits of the regional area of the states and for such other related purposes, as they may deem and determine to be proper, necessary or advisable.
B. Any insurer selling an insurance policy pursuant to this compact, and any policy approved pursuant to this compact, shall satisfy actuarial standards set forth by the National Association of Insurance Commissioners (NAIC) and any regulation promulgated by the commission that is not inconsistent with such NAIC standards. Any insurer selling an insurance policy pursuant to this compact, and any policy approved pursuant to this compact, shall, except as otherwise provided in this compact, comply with the requirements of this title and the regulations promulgated by the Commission.
C. The commission shall have the authority to determine whether an insurer satisfies the standards required by this compact and may not approve a plan that it finds lacks compliance with this compact. The commission shall have the authority to determine whether the plan sold pursuant to this compact continues to satisfy the requirements set forth in this compact in the same manner as is done with regard to an individual accident and health insurance policy approved pursuant to another applicable
provision of law.
D. In addition to the power and authority heretofore granted, the commission shall have the power to enter into such agreements or arrangements with any of the states and with any institutions or agencies, as may be required in the judgment of the commission, to provide adequate services for the benefit of the citizens of the respective states residing within the region.
E. The commission shall have such additional and general power and authority as may be vested in it by the states from time to time by legislative enactments of the said states.
F. Any two (2) or more states which are parties of this compact shall have the right to enter into supplemental agreements for the benefit of citizens residing within an area which constitutes a portion of the general region herein created, such agreements to be governed exclusively by such states and to be controlled exclusively by the members of the commission representing such states, provided such agreement is submitted to and approved by the commission prior to the establishment of such agreements.
COMPACT VI
ELIGIBLE PARTIES AND ENTRY INTO FORCE
This compact shall not take effect or be binding upon any state unless and until it shall be approved by proper legislative action of as many as six (6) or more of the states whose governors have subscribed hereto within a period of eighteen (18) months from the date hereof. When and if six (6) or more states shall have given legislative approval to this compact within said eighteen (18) months period, it shall be and become binding upon such six (6) or more states sixty (60) days after the date of legislative approval by the sixth state and the governors of such six (6) or more states shall name the members of the commission from their states as prescribed in paragraph (a) of the section, and the commission shall then meet on call of the governor of any state approving this compact, at which time the commission shall elect officers, adopt bylaws, appoint committees and otherwise fully organize. Other states whose names are subscribed hereto shall thereafter become parties hereto upon approval of this compact by legislative action within two (2) years from the date hereof, upon such conditions as may be agreed upon at the time.
COMPACT V
WITHDRAWAL, DEFAULT, AND TERMINATION
A. After becoming effective this compact shall thereafter continue without limitation of time. However, it may be terminated at any time by unanimous action of the states and provided, further, that any state may withdraw from this compact if such withdrawal is approved by its legislature, such withdrawal to become effective two (2) years after written notice thereof to the commission accompanied by a certified copy of the requisite legislative action, but such withdrawal shall not relieve the withdrawing state from its obligations hereunder accruing up to the effective date of such withdrawal. Any state so withdrawing shall ipso facto cease to have any claim to or ownership of any of the property held or vested in the commission or to any of the funds of the commission held under the terms of this compact.
B. If any state shall at any time become in default in the performance of any of its obligations assumed herein or with respect to any obligation imposed upon said state as authorized by and in compliance with the terms and provisions of this compact, all rights, privileges and benefits of such defaulting state, its members on the commission and its citizens shall ipso facto be and become suspended from and after the date of such default. Unless such default shall be remedied and made good within a period of one (1) year immediately following the date of such default this compact may be terminated with respect to such defaulting state by an affirmative vote of three-fourths (3/4) of the members of the commission (exclusive of the members representing the state in default), from and after which time such state shall cease to be a party to this compact and shall have no further claim to or ownership of any of the property held by or vested in the commission or to any of the funds of the commission held under the terms of this compact, but such termination shall in no manner release such defaulting state from any accrued obligation or otherwise affect this compact or the rights, duties, privileges or obligations of the remaining states thereunder.
C. In witness whereof this compact has been approved and signed by the governors of the several states, subject to the approval of their respective legislatures in the manner prescribed in this section, as of the ______ day of _______________, 2020.
State of Tennessee, State of West Virginia,
By ___________________ By ___________________
Governor Governor
State of Georgia, State of Arkansas,
By ___________________ By ___________________
Governor Governor
State of Louisiana, State of Alabama,
By ___________________ By ___________________
Governor Governor
State of Mississippi, Commonwealth of Kentucky,
By ___________________ By ___________________
Governor Governor
State of Oklahoma,
By ___________________
Governor
SECTION 2. (1) Each written application for a policy sold in a state which is a party to this compact shall contain the following language in boldface type at the beginning of the document:
"The benefits of this policy may primarily be governed by the laws of a state other than [Name of Compacting State]; therefore, all of the laws applicable to policies filed in this state may not apply to this policy. Any purchase of individual health insurance should be considered carefully since future medical conditions may make it impossible to qualify for another individual health insurance policy."
(2) Each policy sold in a state which is a party to this shall contain the following language in boldface type at the beginning of the document:
"The benefits of this policy providing your coverage may be governed primarily by the laws of a state other than [Name of Compacting State]. The benefits covered may be different from other policies you can purchase. Please consult your insurance agent or insurer to determine which health benefits are covered under this policy."
(3) Each individual accident and sickness policy sold in a state which is a party to this compact shall contain a side-by-side chart that compares the definitions of each benefit covered by the policy that has been sold in the other state with the definitions of the benefits covered under current [Name of Compacting State] laws and regulations where the specified benefit is similarly termed but defined differently.
SECTION 3. This act shall take effect and be in force from and after July 1, 2020.