80
th Legislative Session _ 2005
Committee: Senate Commerce
Tuesday, February 08, 2005
P - Present
E - Excused
A - Absent
Roll Call
P Abdallah
P Kelly
P Koetzle
P Schoenbeck
P Sutton (Dan)
P Broderick, Vice-Chair
P McCracken, Chair
OTHERS PRESENT: See Original Minutes
The meeting was called to order by Senator McCracken, Chair
MOTION:
TO APPROVE THE MINUTES OF FEBRUARY 3, 2005
Moved by: Koetzle
Second by: Broderick
Action: Prevailed by voice vote.
The Chair deferred SB 179 until February 10, 2005.
SB 153: authorize certain dental hygienists to perform limited services to persons not
currently under the care of a dentist.
Presented by: Senator Tom Dempster
Proponents: Chuck Schroyer, SD Dental Hygienists's Assn.(Handouts 1, 2 & 3)
Deb Nelson, SD Dental Hygienists's Assn.
Suzanne Luken, SD Dental Hygientists's Assn.
Kenneth Senger, SD Assn. Of Healthcare Organizations
Opponents: Monty Bechtold, dentist, Pierre
Amber Determan, dentist, Mitchell
Paul Knecht, SD Dental Association
MOTION:
DEFER SB 153 TO THE 41
ST LEGISLATIVE DAY
Moved by: Schoenbeck
Second by: Broderick
Action: Prevailed by roll call vote.(6-1-0-0)
Voting Yes: Abdallah, Kelly, Koetzle, Schoenbeck, Sutton (Dan), Broderick
Voting No: McCracken
SB 167: provide health insurance coverage for contraceptive drugs and devices.
(Continued from meeting of February 3, 2005.)
Presented by: Senator Stanford Adelstein (Handout 4)
Proponents: Kate Looby, Planned Parenthood, Sioux Falls
Jennifer Ring, ACLU of The Dakotas
Opponents: Randy Moses, Division of Insurance
Travis Benson, Catholic Diocese of Sioux Falls, Sioux Falls
Mike Shaw, American Family Insurance Group
Deb Fischer Clemens, Avera Health Systems
MOTION:
TO TABLE SB 167
Moved by: Abdallah
Second by: Schoenbeck
Action: Prevailed by roll call vote.(7-0-0-0)
Voting Yes: Abdallah, Kelly, Koetzle, Schoenbeck, Sutton (Dan), Broderick, McCracken
SB 163: exempt certain multiple employer welfare arrangements from unauthorized
insurers process provisions.
Presented by: Senator Tom Dempster
Proponents: Curt Everson, SD Bankers Association
Randy Moses, Division of Insurance
MOTION:
AMEND SB 163
163ja
On the printed bill, delete everything after the enacting clause and insert:
"
Section 1. That chapter
58-18B
be amended by adding thereto a NEW SECTION to read as
follows:
The rating requirements of this chapter do not apply to an association if all of the following
criteria are met:
(1) The trade, industry, or professional association is comprised in part of homogenous small
employers, meets the requirements for the issuance of group health insurance pursuant to
§
58-18-3 and if applicable,
§
58-18-4, has a constitution or bylaws, has been organized
under the laws of South Dakota and maintained in good faith for purposes other than
providing insurance for at least ten continuous years, and will provide coverage to not
fewer than five hundred employees by January 1, 2007;
(2) The group health plan provides coverage to association members' employees and
dependents on a community rated basis;
(3) The director, after consideration of the impact on the insurance-buying public, has
determined that the arrangement is in the best interest of the public.
Section 2. That chapter
58-18
be amended by adding thereto a NEW SECTION to read as
follows:
A self-funded multiple employer trust, as defined in section 3 of the federal Employee
Retirement Income Security Act of 1974, 29 U.S.C.
§
1002, paragraph 40, may be authorized by the
director if the multiple employer trust meets all of the following conditions:
(1) The multiple employer trust is administered by an authorized insurer or a licensed third-
party administrator;
(2) The multiple employer trust meets all of the requirements of section 1 of this Act;
(3) The multiple employer trust is established by a homogenous trade, industry, or
professional association of employers that has a constitution or bylaws, is organized under
the laws of South Dakota and has been maintained in good faith for purposes other than
providing insurance for at least ten continuous years;
(4) The association sponsoring the multiple employer trust is engaged in substantial activity
for its members other than sponsorship of an employer welfare benefit plan;
(5) The association sponsoring the multiple employer trust is a nonprofit entity organized
under applicable South Dakota law;
(6) The multiple employer trust, upon authorization by the director, participates in the South
Dakota Life and Health Insurance Guaranty Association pursuant to chapter 58-29C and
is a member pursuant to subdivision 58-29C-48(12);
(7) The multiple employer trust:
(a) Meets the capital and surplus requirements of
§
58-6-23;
(b) Meets the risk based capital requirements of
§
58-4-48;
(c) Is subject to the hazardous financial condition requirements of
§
§
58-4-39 to 58-4-
42, inclusive;
(d) Invests its assets pursuant to the requirements of chapters 58-26 and 58-27;
(e) Is subject to chapter 58-3 on the same basis as insurers;
(f) Is subject to the insurers supervision, rehabilitation, and liquidation provisions of
chapter 58-29B.
Section 3. That chapter
58-18
be amended by adding thereto a NEW SECTION to read as
follows:
The director shall promulgate rules, pursuant to chapter 1-26, pertaining to multiple employer
trusts in the following areas:
(1) Consumer protection issues including minimum coverage standards for health policies;
claims processing and payment practices; resolution of consumer complaints; compliance
with federal HIPAA standards; plan termination processes and managed care protections;
financial and market conduct record-keeping and reporting; and unfair trade practices; and
(2) Financial and plan solvency issues including investment capital requirements; surplus and
deposit requirements; claims reserves, stop loss coverage, and standards for entry and exit
of plan members including a nonrefundable minimum deposit of not less than two
thousand five hundred dollars plus two percent of first year contributions on an annual
basis; and production of financial statements, audited financial statements, and actuarial
opinions.
Section 4. That chapter
58-18
be amended by adding thereto a NEW SECTION to read as
follows:
Except as otherwise provided in this Act, a multiple employer trust organized pursuant to this
Act may not be deemed to be or considered to be an insurance company or association of any kind
or character under Title 58, or subject to the provisions of
§
§
58-8-6 to 58-8-19, inclusive.
Section 5. That chapter
58-18
be amended by adding thereto a NEW SECTION to read as
follows:
A multiple employer trust authorized by this Act may have its authorization suspended or
revoked by the director for violating any provision of this Act or because its capital is impaired, and
in either instance the director may take action in lieu of suspension or revocation as though the trust
were an insurer as provided by
§
58-4-28.1.
Section 6. That chapter
58-18
be amended by adding thereto a NEW SECTION to read as
follows:
If not otherwise provided, a multiple employer trust doing business in this state on a self-funded
basis shall pay premium taxes as required in chapter 10-44 based upon the amount each participating
employer contributes, including any amounts contributed by employees and dependents, to the plan
on an annual basis. If a multiple employer trust purchases excess or stop loss coverage, the multiple
employer trust may not be taxed additionally for that coverage.
Section 7. That chapter
58-18
be amended by adding thereto a NEW SECTION to read as
follows:
No agent may sell, solicit, or negotiate a self-funded multiple employer trust authorized by this
Act unless the agent is licensed to sell life and health insurance pursuant to chapter 58-30.
Section 8. That chapter
58-18
be amended by adding thereto a NEW SECTION to read as
follows:
The provisions of this Act do not apply to any single employer self-funded plan as preempted
by Employee Retirement Income Security Act of 1974, 29 U.S.C.
§
1144 or any arrangement
exempted pursuant to
§
1-24-17. A self-funded multiple employer trust authorized by this Act may
include as participating employers both small employers and large employers.".
Moved by: Schoenbeck
Second by: Kelly
Action: Prevailed by voice vote.
MOTION:
DO PASS SB 163 AS AMENDED
Moved by: Schoenbeck
Second by: Abdallah
Action: Prevailed by roll call vote.(7-0-0-0)
Voting Yes: Abdallah, Kelly, Koetzle, Schoenbeck, Sutton (Dan), Broderick, McCracken
MOTION:
TO AMEND TITLE OF SB 163
163jta
On page
1,
line 1 of the printed bill,
delete everything after "
Act to
"
and insert "authorize certain
multiple employer trusts.".
On page
1
,
delete line
2
.
Moved by: Schoenbeck
Second by: Abdallah
Action: Prevailed by voice vote.
SB 176: provide for the recovery of amounts paid by an insurance company to the
Insurance Guaranty Association through the use of a premium surcharge.
The Gavel was passed to Vice Chair Broderick.
Proponents: Larry Nelson, American International Group
Opponents: Larry Ahrendt, SD Assn. Of Insurance Agents
Mike Shaw, DeSmet Insurance Company of South Dakota
MOTION:
AMEND SB 176
176ja
On page
2,
line 1 of the printed bill,
delete "
insured
"
and insert "
insurer
".
Moved by: Koetzle
Second by: Sutton (Dan)
Action: Prevailed by voice vote.
MOTION:
DEFER SB 176 TO THE 41ST LEGISLATIVE DAY
Moved by: Schoenbeck
Second by: Abdallah
Action: Prevailed by roll call vote.(6-1-0-0)
Voting Yes: Abdallah, Kelly, Koetzle, Schoenbeck, Broderick, McCracken
Voting No: Sutton (Dan)
MOTION:
ADJOURN
Moved by: Koetzle
Second by: Schoenbeck
Action: Prevailed by voice vote.
Grace Curtis
____________________________
Committee Secretary
Royal "Mac" McCracken, Chair
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