HOUSE BILL No. 2247
the sunset provision and making other clarifications of the act; amending K.S.A. 40-
Section 1. K.S.A. 40-4707 is hereby amended to read as follows: 40-
4707. (a) K.S.A. 40-4701 through 40-4707 and amendments thereto shall
be known as the Kansas business health partnership act.
(b) The provisions of the Kansas business health partnership act shall
expire on July 1, 2002.
Sec. 2. K.S.A. 40-4701 is hereby amended to read as follows: 40-
4701. As used in K.S.A. 40-4701 through 40-4707 and amendments
(a) ``Carrier'' means any insurance company, nonprofit medical and
hospital service corporation, nonprofit optometric, dental, or pharmacy
service corporation, municipal group-funded pool, fraternal benefit so-
ciety or health maintenance organization, as these terms are defined by
chapter 40 of the Kansas Statutes Annotated, and amendments thereto,
that offers health benefit plans covering eligible employees of one or more
small employers in the state.
(b) ``Health committee'' means the Kansas business health policy
committee as specified in K.S.A. 40-4702, and amendments thereto.
(c) ``Dependent'' means the spouse or any child of an eligible em-
(d) ``Eligible employee'' shall have the meaning ascribed to it in
K.S.A. 40-2209d and amendments thereto.
(e) ``Health benefit plan'' means any hospital or medical expense pol-
icy, health, hospital or medical services corporation contract, and a plan
provided by a municipal group-funded pool, or a health maintenance
organization contract offered by any employer or any certificate issued
under any such policy, contract or plan.
(f) ``Kansas business health partnership'' or ``health partnership''
means a nonrisk bearing nonprofit corporation that has responded to a
request for a proposal by the health committee and has been selected by
the health committee to provide health insurance through multiple un-
affiliated participating carriers to small employers and their eligible em-
(g) ``Low wage or modest wage employee'' means any eligible em-
ployee whose family income does not exceed 200% of the poverty level.
(h) ``Small employer'' shall have the meaning ascribed to it in K.S.A.
40-2209d and amendments thereto.
Sec. 3. K.S.A. 40-4702 is hereby amended to read as follows: 40-
4702. (a) The governor of the state of Kansas shall appoint a cabinet level
committee which shall be known as the Kansas business health policy
(b) The Kansas business health policy committee, hereinafter re-
ferred to as the health committee, shall consist of:
(1) The secretary of the department of commerce and housing or the
(2) the secretary of the department of social and rehabilitation serv-
ices or the secretary's designee;
(3) the commissioner of insurance or the commissioner's designee;
(4) one member appointed by the president of the senate;
(5) one member appointed by the speaker of the house of represen-
(6) one member appointed by the minority leader of the senate;
(7) one member appointed by the minority leader of the house of
(8) three members at large from the private sector appointed by the
The secretary of each state agency represented on this committee shall
provide such staff and other resources as the health committee may re-
(c) (1) The initial meeting of the health committee shall be convened
within 60 days after the effective date of this act by the governor at a time
and place designated by the governor.
(2) Meetings of the health committee subsequent to its initial meet-
ing shall be held and conducted in accordance with policies and proce-
dures established by the health committee.
(3) Commencing at the time of the initial meeting of the health com-
mittee, the powers, authorities, duties and responsibilities conferred and
imposed upon the health committee by this act shall be operative and
(d) The health committee shall develop and approve a request for
proposals for a qualified entity to serve as the Kansas business health
partnership, hereinafter referred to as health partnership, which shall
provide a mechanism to combine federal and state subsidies with contri-
butions from small employers and eligible employees to purchase health
insurance in accordance with guidelines developed by the health com-
(e) The health committee shall evaluate responses to the request for
proposals and select the qualified entity to serve as the health partnership.
(f) The health committee shall:
(1) Develop and, approve and revise subsidy eligibility criteria pro-
(A) Low wage and modest wage employees of small employers shall
be eligible for subsidies if:
(1) The small employer has not previously offered health insurance
(2) the small employer has previously offered health insurance cov-
erage and a majority of such small employer's employees are low wage
or modest wage employees as defined in K.S.A. 40-4701, and amendments
(B) any small employer's eligible employee with a child who is eligible
for coverage under the state childrens' health insurance program estab-
lished by K.S.A. 38-2001 et seq., and amendments thereto, or in the state
medical assistance program shall be eligible automatically for a subsidy
and shall be included in the determination of eligibility for the small
employer and its low-and-modest wage employees; and
(C) at least 70% of the small employer's eligible employees without
group health insurance coverage from another source are insured through
the partnership; and
(2) determine and arrange for eligibility determination for subsidies
of low wage or modest wage employees; and
(3) develop subsidy schedules based upon eligible employee wage
levels and family income.
(g) The health committee shall oversee and monitor the ongoing op-
eration of any subsidy program and the financial accountability of all sub-
sidy funds. If, in the judgment of the health committee, the entity selected
to serve as the health partnership fails to perform as intended, the health
committee may terminate its selection and designation of that entity as
the health partnership and may issue a new request for proposal and select
a different qualified entity to serve as the health partnership.
(h) The health committee is hereby authorized to accept funds from
the federal government, or its agencies, or any other source whatsoever
for research studies, investigation, planning and other purposes related
to implementation of the objectives of this act. Any funds so received
shall be deposited in the state treasury and shall be credited to a special
revenue fund which is hereby created and shall be known as the health
committee insurance fund and used in accordance with or direction of
the contributing federal agencies. Expenditures from such fund may be
made for any purpose in keeping with the responsibilities, functions and
authority of the department. Warrants on such fund shall be drawn in
the same manner as required of other state agencies upon vouchers
signed by the secretary of the department of social and rehabilitation
services upon receiving prior approval of the health committee.
(i) The health committee is authorized to develop policies for the
administration of the subsidy program and for the use of additional fed-
eral or private funds to subsidize health insurance coverage for low-and-
modest wage employees of predominantly low-wage small employers.
(j) The health committee is hereby authorized to organize, or cause
to be organized, one or more advisory committees. No member of any
advisory committee established under this subsection shall have previ-
ously received or currently receive any payment or other compensation
from the health partnership. The membership of each advisory committee
established under this subsection shall contain at least one representative
who is a small employer and one representative who is an eligible em-
ployee as defined in K.S.A. 40-4701, and amendments thereto, and one
representative of the insurance industry.
Sec. 4. K.S.A. 40-4704 is hereby amended to read as follows: 40-
4704. The health partnership shall develop and offer two or more health
benefit plans to small employers. In any health benefit plan developed
under this act, any carrier may contract for coverage within the scope of
this act notwithstanding any mandated coverages otherwise required by
state law. Except for preventative and health screening services, the pro-
visions of K.S.A. 40-2,100 to 40-2,105, inclusive, 40-2114 and subsection
(i) of 40-2209 and 40-2229 and 40-2230, and 40-2,163, 40-2,164, 40-2,165
and 40-2,166, and amendments thereto, shall not be mandatory with re-
spect to any health benefit plan developed under this act. In performing
these duties, the health partnership shall:
(a) Develop and offer two or more lower-cost benefit plans such that:
(1) Each health benefit plan is consistent with any criteria established
by the health partnership;
(2) each health benefit plan shall be offered by all participating car-
riers except that no participating carrier shall be required to offer any
health benefit plan, or portion thereof, which such participating carrier
is not licensed or authorized to offer in this state;
(3) no participating carrier shall offer any health benefit plan devel-
oped under this act to any small employer unless such small employer is
covered through the health partnership.
(b) Develop and make available one or more supplemental health
benefit plans or one or more other benefit options so that the total pack-
age of health benefits available to all children eligible children who re-
ceive health benefits through the health partnership for the state chil-
dren's health insurance program established pursuant to K.S.A. 68-2001
et seq., and amendments thereto, meets, at a minimum, standards estab-
lished by the federal health insurance program.
(c) Offer coverage to any qualifying small employer.
(d) Offer eligible employees of participating small employers a choice
of participating carriers where feasible.
(e) (1) Include centralized and consolidated enrollment, billing and
customer service functions;
(2) use one standard enrollment form for all participating carriers;
(3) submit one consolidated bill to the small employer.
(f) Issue or cause to be issued a request for proposals and contract
with a qualified vendor for any administrative or other service not per-
formed by the health committee or provided to the health committee
under subsection (b) of K.S.A. 40-4702, and amendments thereto.
(g) Issue a request for proposals and selectively contract with carriers.
(h) Establish conditions of participation for small employers that con-
form with K.S.A. 40-2209b et seq., and amendments thereto, and the
health insurance portability and accountability act of 1996 (Public Law
(i) Enroll small employers and their eligible employees and depend-
ents in health benefit plans developed under this act.
(j) Bill and collect premiums from participating small employers in-
cluding any share of the premium paid by such small employer's enrolled
(k) Remit funds collected under subsection (h) to the appropriate
(l) Provide that each eligible low-or-modest wage employee shall be
permitted to enroll in such employee's choice of participating carrier
(m) Develop premium rating policies for small employers.
(1) In consultation with the health committee, the health partnership
shall ensure, to the maximum extent possible, that the combined effect
of the premium rating and subsidy policies is that subsidized workers
eligible employees and the dependents of such subsidized workers eligible
employees can afford coverage.
(2) Any rating policy developed under this subsection may vary with
respect to subsidy status of workers eligible employees and the dependents
of such workers eligible employees.
(n) Be authorized to contract for additional group vision, dental and
life insurance plans, and other limited insurance products.
(o) Take whatever action is necessary to assure that any adult or child
eligible employee or dependent of such eligible employee who receives
health benefit coverage through the health benefit partnership and who
is eligible for the state medical assistance program shall remain eligible
to participate in the state health insurance premium payment program.
(p) Coordinate with the department of social and rehabilitation serv-
ices to assure that any funds available for the coverage of infants and
pregnant women under the state medical assistance program are also
available for the benefit of eligible infants and pregnant women who re-
ceive health benefit coverage through the health partnership as an eligible
employee or dependent of such eligible employee.
Sec. 5. K.S.A. 40-4706 is hereby amended to read as follows: 40-
4706. The department of social and rehabilitation services shall investi-
gate and pursue all possible policy options to bring into this partnership
title XIX and the title XXI eligible families of any eligible employees em-
ployed by a small employer. Further, the department of social and re-
habilitation services shall develop and seek federal approval of any ap-
propriate variance or state plan amendment for the state children's health
insurance program established by K.S.A. 38-2001 et seq., and amend-
ments thereto, and the state medical assistance program required to ac-
complish the purposes of this act.
Sec. 6. K.S.A. 40-4701, 40-4702, 40-4704, 40-4706 and 40-4707 are
Sec. 7. This act shall take effect and be in force from and after its
publication in the statute book.
Approved May 16, 2002.
Date Composed: 10/10/2002 Date Modified: 10/10/2002