Chairman Vincent C. Gray
Councilmember
David A. Catania
Councilmember Jack Evans
Councilmember
Kwame R. Brown
Councilmember Tommy Wells
Councilmember
Harry Thomas, Jr.
Councilmember Yvette Alexander
Councilmember
Mary Cheh
Councilmember Phil Mendelson
A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
To establish the Healthy DC Program; to require that
District residents maintain health insurance coverage; to increase
Medicaid fee-for-service reimbursement rates; to amend the Healthy DC
Fund to allow for additional revenue to be deposited; to require
health maintenance organizations to pay a premium tax; to increase the
cigarette tax and to raise the premium tax imposed on health insurers
in the District; and, to require that all products on the individual
health insurance market be guaranteed issue and community rated.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF
COLUMBIA, That this act may be cited as the “Healthy DC Act of
2008”.
TITLE I – Healthy DC Program
Sec. 101. Definitions.
For purposes of this title, the term:
(1) “Employer” means any individual, firm,
association, or corporation, any receiver or trustee of any individual
firm, association, or corporation, or the legal representative of a
deceased employer who uses the services of another individual for pay
in the District.
(2) “Employee” means any individual who has been
employed by the same employer for 1 year and has worked at least 1000
hours without a break in service, except for regular holiday, sick, or
personal leave granted by the employer.
(3) “Health insurer” means any person that provides
one or more health benefit plans or insurance in the District of
Columbia, including an insurer, a hospital and medical services
corporation, a fraternal benefit society, a health maintenance
organization, a multiple employer welfare arrangement, or any other
person providing a plan of health insurance subject to the authority
of the Commissioner of the Department of Insurance, Securities and
Banking.
Sec. 102. Establishment of Healthy DC Program;
administration.
(a) There is established the Healthy DC Program
(“Program”) which shall provide affordable health insurance
benefits to eligible individuals.
(b) The Program shall be administered by the Department
of Health Care Finance, established by the Department of Health Care
Finance Establishment Act of 2007, effective February 27, 2008 (D.C.
Law 17-109; 55 DCR 216).
Sec. 103. Program eligibility.
An individual shall be eligible for the Program if the
individual:
(1) Has resided in the District for at least 6 months
at the time of application to the Program;
(2) Resides in a household having a gross household
income greater than 200% of the Federal Poverty Guidelines as updated periodically
in the Federal Register by the U.S. Department of Health and Human
Services under the authority of 42 U.S.C. 9902(2);
(3) Does not qualify for the District of Columbia
HealthCare Alliance, Medicare, Medicaid, or other federal health
benefits programs; and
(4)(A) Has not had health insurance during the 6-month
period prior to application to the Program;
(B) Has had health insurance during the 6-month period
prior to application to the Program but the insurance was terminated
due to:(i) The loss of employment;
(ii) A death of a spouse, domestic partner, or family
member who maintained the individual as a beneficiary on a health
insurance plan;(iii) Changes in student status, including graduation,
a leave of absence, or reduction to part-time study;(iv) A change of employment to a new employer who does
not provide group health insurance;(v) A legal annulment, separation, divorce, or the
dissolution of a domestic partnership;(vi) The loss of financial eligibility under Medicaid
or the District of Columbia HealthCare Alliance;(vii) The cancellation or discontinuation of a group
health insurance contract by a health insurer; or(viii) Any other reason as determined by the Mayor;
(C) Has employer-based health insurance but the annual
premium cost to the individual is deemed unaffordable as determined by
the Mayor; or(D) Has insurance coverage as an individual through a
health insurer, including participation in the Open Enrollment Program
as established by section 15 of the Hospital and Medical Services
Corporation Regulatory Act of 1996, effective April 9, 1997 (D.C. Law
11-245; D.C. Code § 31-3514).
Sec. 104. Program benefits; affordability.
(a) The Program shall provide, at minimum, the
following health benefits:
(1) Hospitalization, both in-patient and
out-patient;(2) Physician services;
(3) Mental health services;
(4) Substance abuse treatment;
(5) Maternity; and
(6) Prescription pharmaceuticals.
(b) The Program shall maintain the following
affordability criteria for individual participants:
(1) Annual premium costs shall not exceed 3% of the
individual’s gross income; and(2) All other annual costs, excluding annual premium
costs, shall not exceed 6% of the individual’s gross income.
Sec. 105. Program implementation; funding.
(a) The Mayor shall make the Program available to
eligible individuals by July 1, 2009.
(b) To meet the deadline set forth in subsection (a) of
this section, the Mayor is authorized to enter into a contract with
CareFirst, Inc. to implement
and carry out the Program.
(c) Any contract entered into pursuant to this section
shall require annual reporting of clinical quality measurements and
utilization data to the Mayor.
(d) The Program shall be funded through the Healthy DC
Fund as established by section 15b of the Hospital and Medical
Services Corporation Regulatory Act of 1996, effective March 2, 2007
(D.C. Law 16-19; D.C. Code § 31-3514.02) (“Fund”).
Sec. 106. Notice of change in insurance requirement.
(a) Prior to eliminating or restricting the
availability of any health insurance plans offered in the District, a
health insurer shall submit a notice of change to the Commissioner of
the Department of Insurance, Securities and Banking explaining the
proposed change. The notice of change shall be submitted in a manner
and form determined by the Mayor.
(b) The failure or refusal to submit a notice of change
required by this section shall be subject to a civil penalty not to
exceed $10,000 for each such failure or refusal.
Sec. 107. Employer reporting requirement.
(a) Beginning in 2010, employers shall submit an annual
report, in a manner and form determined by the Mayor, attached to
their tax return that includes the following information for the prior
calendar year:
(1) The number of its employees who were located in the
District of Columbia;(2) The total cost to the employer of providing health
insurance benefits on an expense reimbursed or prepaid basis to those
employees who were located in the District of Columbia;(3) The average per employee cost to the employer of
providing health insurance benefits on an expense reimbursed or
prepaid basis to those employees who were located in the District of
Columbia; and(4) Any other information as required by the Mayor.
(b) Any employer that refuses or otherwise fails to
submit the report required by this section shall be subject to a civil penalty not to
exceed $10,000 for each such refusal or failure.
Sec. 108. Employer
maintenance of effort.
(a) Beginning in 2009, an employer shall be required to
maintain the same level of per employee health care expenditure as it
did during the prior calendar year, unless granted a waiver of
compliance with this requirement by the Mayor. For purposes of this
subsection, the per employee health care expenditure shall be the
average per employee cost to the employer of providing health
insurance benefits on an expense reimbursed or prepaid basis to those
employees located in the District of Columbia.
(b) An employer found by the Mayor to be in violation
of this section shall be subject to a fine of not less than double the
difference between the employer’s total required expenditure to
provide health insurance benefits on an expense reimbursed or prepaid
basis to its employees located in the District and the employer’s
actual expenditure.
Sec. 109. Prohibitions.
(a) It shall be unlawful for a health insurer to
eliminate or restrict the availability of a health insurance plan
offered in the District with the intent of shifting beneficiaries to
the Program. A health insurer found to be in violation of this
subsection shall be subject to a fine of not less than $10,000.
(b) It shall be unlawful for an employer that provides
or contributes toward the cost of group health insurance benefits on
an expense reimbursed or prepaid basis for its employees to eliminate
such benefits or to change the terms of an employee’s employment
with the intent of shifting responsibility for employee health
insurance to the Program. An employer found by the Mayor to be in
violation of this section shall be subject to a fine of not less than
double the difference between the employer’s required health
expenditure and the employer’s actual health expenditure for the
calendar year in which the violation was found.
Sec. 110. Disposition of fines and penalties.
Fines and penalties collected pursuant to this title
shall be deposited in the Fund.
Sec. 111. Rulemaking.
The Mayor, pursuant to Title I of the District of
Columbia Administrative Procedure Act, approved October 21, 1968 (82
Stat. 1204; D.C. Official Code § 2-501 et seq.), shall issue rules to
implement the provisions of this title.
TITLE II – Individual insurance mandate
Sec. 201. Definitions.
For purposes of this title, the term “continuous
health coverage” means the ongoing participation by an individual in
a health insurance plan, either as an individual or as a named
beneficiary on another individual’s coverage, with no lapse in
coverage exceeding 63 days in any calendar year.
Sec. 202. Individual mandate.
By July 1, 2009, each District resident who is 18 years
of age or older shall obtain and maintain continuous health coverage.
Sec. 203. Compliance; penalties.
(a) Beginning January 1, 2011, each individual required
to maintain continuous health coverage pursuant to section 202 shall
certify under penalty of perjury in his or her income tax return for
the prior calendar year that for that prior calendar year, the
individual either:
(1) maintained continuous health coverage; or
(2) was exempt pursuant to section 204.
(b)(1) The failure to meet the requirement set forth in
section 202 for a calendar year shall result in a penalty. The amount
of the penalty shall be determined by the Mayor; provided, that it
shall be no less than $250.
(2) The failure to meet the requirement set forth in
section 202 for any two consecutive calendar years shall result in a
penalty. The amount of the penalty shall be determined by the Mayor;
provided, that it shall be no less than $500.
(c) Any penalties collected pursuant to this section
shall be deposited in the Healthy DC Fund as established by section
15b of the Hospital and Medical Services Corporation Regulatory Act of
1996, effective March 2, 2007 (D.C. Law 16-19; D.C. Code §
31-3514.02).
Sec. 204. Exemptions; waiver.
(a) An individual for whom the requirement set forth in
section 202 would violate the established tenets and practices of his
or her religion shall be exempt from the requirements of this title.
(b)(1) The Mayor may grant an economic hardship waiver
from the requirement set forth in section 202 to an individual whose
annual premium costs would exceed 6% of gross income.
(2) The Mayor may grant a hardship waiver from the
penalties set forth in section 203(b).(3) Any waiver granted pursuant to this subsection
shall be based on regulations issued in accordance with this title.
Sec. 205. Rulemaking.
The Mayor, pursuant to Title I of the District of
Columbia Administrative Procedure Act, approved October 21, 1968 (82
Stat. 1204; D.C. Official Code § 2-501 et seq.), shall issue rules to
implement the provisions of this title.
TITLE III – Medicaid reimbursement rates
Sec. 301. Reimbursement rates.
The Department of Health Care Finance, established by
the Department of Health Care Finance Establishment Act of 2007,
effective February 27, 2008 (D.C. Law 17-109; 55 DCR 216), shall
increase the specialty physician and primary care physician
reimbursement rates under the District Medicaid fee-for-service
program to match the specialty physician and primary care physician
reimbursement rates under the federal Medicare program.
Sec. 302. Funding.
Implementation of this title shall be subject to
appropriations.
TITLE IV – Healthy DC Fund amendment
Sec. 401. Section 15b of the Hospital and Medical
Services Corporation Regulatory Act of 1996, effective March 2, 2007
(D.C. Law 16-192; D.C. Official Code § 31-3514.02.), is amended to read as follows:
“Section 15b. Establishment of Healthy DC Fund.
“(a) There is established a segregated, nonlapsing
fund designated as the Healthy DC Fund ("Fund"). Funds
deposited into the Fund shall not revert to the General Fund of the
District of Columbia at the end of any fiscal year, or at any other
time, but shall be continually available to support the Healthy DC
Program (“Program”), established by the Healthy DC Act of 2008, as
introduced on April 1, 2008 (D.C. Bill 17-__), and, if funds remain in
the Fund in any given fiscal year after the Program has been fully
funded, to support other publicly financed health care programs,
including the District’s Medicaid program and the DC HealthCare
Alliance; provided, that the Fund shall at all times maintain a
minimum balance as determined by the Mayor so as to secure funding for
the Program for a minimum of 12 months.“(b) There shall be deposited into the Fund:
“(1) All tax revenue derived pursuant to section 15a;
“(2) Any other local funds, including any fees,
penalties and other tax revenue required by District law;“(3) Annual appropriations, if any;
“(4) Federal grant funds;
“(5) All fines and penalties collected pursuant to
Titles I and II of the Healthy DC Act of 2008, as introduced on April
1, 2008 (D.C. Bill 17-__); and “(6) Grants, gifts, or subsidies from
public or private sources.”
TITLE V – Tax amendments.
Sec. 501. The Health Maintenance Organization Act of
1996, effective April 9, 1997 (D.C. Law 11-235; D.C. Official Code §
31-3401 et seq.) is amended by adding a new section 4a to read as
follows:
“(4a) Premium tax.
“(a) Effective January 1, 2009, all health
maintenance organizations shall pay to the District of Columbia, for
each calendar year, a sum of money as taxes equal to 2.0% of their
policy and membership fees and net premium receipts or consideration
received in such calendar year, excluding those fees, receipts or
consideration received pursuant to District Medicaid program, the
District of Columbia HealthCare Alliance, any federal employee health
benefit program or Medicare, on all policies or contracts in the
District of Columbia. Such tax shall be in lieu of all other taxes
except:“(1) Taxes upon real estate; and
“(2) Fees and charges provided for pursuant to the
Health Maintenance Organization Act of 1996, effective April 9, 1997
(D.C. Law 11-235; D.C. Code § 31-3401 et seq.).“(b)(1) Except as provided in paragraph (2) of this
subsection, the tax imposed for calendar year 2009, and for each
calendar year thereafter, shall be paid on or before the first day of
June of the calendar year in which the income to be taxed is received
and before the first day of March following the close of each calendar
year. The June payment shall be an amount equal to 1/2 of the total
premium tax liability determined for the preceding calendar year. In
accordance with rules prescribed by the Mayor, each company shall
determine its total tax liability for each calendar year and pay the
remainder, if any, on or before the first day of March following the close of each calendar year. Overpayments
of tax may be refunded to the company or credited to the company’s
next installment payment, at the election of the company.“(2) The installment payment provision of subsection
(b)(1) of this section shall not apply in the case of any company
having a tax liability for the preceding calendar year less than
$1,000. In such cases the tax shall be paid on or before the first day
of March following the close of the calendar year.“(c) The certificate of authority of any health
maintenance organization may be revoked for failure to pay the
required premium tax.“(d) All revenues collected pursuant to this
paragraph shall be deposited in the Healthy DC Fund as established by
section 15b of the Hospital and Medical Services Corporation
Regulatory Act of 1996, effective March 2, 2007 (D.C. Law 16-192; D.C.
Code § 31-3514.02).”
Sec. 502. Title 47 of the District of Columbia Official
Code is amended as follows:
(a) Section 47-2402(a) is amended by striking the
phrase “$.05 for each cigarette.” and inserting the phrase “$.10
for each cigarette.” in its place.
(b) Section 47-2608(a) is amended as follows:
(1) Paragraph (1) is amending by striking the phrase
“All such companies” and inserting “Except as provided in
paragraph (1A), all such companies” in its place.(2) A new paragraph (1A) is added to read as follows:
“(1A)(A) All companies which issue contracts of
insurance against accident and loss of health shall pay to the
District of Columbia, for each calendar year, a sum of money as taxes
equal to 2.0% of their policy and membership fees and net premium
receipts or consideration received in such calendar year on all
policies or contracts in the District of Columbia. Such tax shall be in lieu of all other taxes
except:“(i) Taxes upon real estate; and
“(ii) Fees and charges provided for by the insurance
laws of the District including amendment made to such laws by this
chapter.“(B) All funds collected pursuant to this paragraph
shall be deposited in the Healthy DC Fund as established by section
15b of the Hospital and Medical Services Corporation Regulatory Act of
1996, effective March 2, 2007 (D.C. Law 16-192; D.C. Code §
31-3514.02).”
TITLE VI – Insurance market regulation
Sec. 601. Definitions.
For purposes of this title, the term:
(1) “Community rated” means an insurance premium
that is calculated based on the costs for all covered individuals divided by the number of
covered persons so as to produce a single per person rate that reflects the average total costs
of all members in an individual coverage plan.
(2) “Guaranteed
issue” shall mean that no carrier shall decline coverage for an
individual.
Sec. 602. Individual insurance market.
Beginning July 1, 2009, all health insurance policies
issued to individual subscribers, including any policies issued
pursuant to the Healthy DC Program established by the Healthy DC Act
of 2008, as introduced on April 1, 2008 (D.C. Bill 17-__), shall be
guaranteed issue and community rated.
Sec. 603. Policy maintenance.
All individual health insurance policies issued prior
to July 1, 2009, shall continue in force until renewal. Upon renewal,
the policy shall comply with section 602.
TITLE VII
Sec. 701. Fiscal impact statement.
The Council adopts the fiscal impact statement in the
committee report as the fiscal impact statement required by section
602(c)(3) of the District of Columbia Home Rule Act, approved December
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(3)).
Sec. 702. Effective date.
This act shall take effect following approval by the
Mayor (or in the event of veto by the Mayor, action by the Council to
override the veto), a 60-day period of Congressional review, as
provided in section 602(c)(1) of the District of Columbia Home Rule
Act, approved December 24, 1973 (87 Stat. 813; D.C. Official Code §
1-206.02(c)(1)), and publication in the District of Columbia Register.