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LRB-0764/1
TJD&PJK:kjf:rs
2015 - 2016 LEGISLATURE
April 8, 2015 - Introduced by Senators Vinehout, Carpenter, Harris Dodd,
Erpenbach, Ringhand and C. Larson, cosponsored by Representatives
Sargent, Danou, Zepnick, Hesselbein, Spreitzer, Subeck, Hebl, Ohnstad,
Berceau, Sinicki, Riemer, Considine, Goyke, C. Taylor and Bowen. Referred
to Committee on Health and Human Services.
SB107,1,11 1An Act to amend 1.12 (1) (b), 13.172 (1), 13.62 (2), 13.95 (intro.), 16.002 (2),
216.004 (4), 16.004 (5), 16.004 (12) (a), 16.045 (1) (a), 16.15 (1) (ab), 16.41 (4),
316.417 (1) (a), 16.52 (7), 16.528 (1) (a), 16.53 (2), 16.54 (9) (a) 1., 16.70 (2), 16.72
4(2) (e) (intro.), 16.72 (2) (f), 16.75 (1m), 16.75 (8) (a) 1., 16.75 (8) (a) 2., 16.75 (9),
516.765 (1), 16.765 (2), 16.765 (4), 16.765 (5), 16.765 (6), 16.765 (7) (intro.),
616.765 (7) (d), 16.765 (8), 16.85 (2), 16.865 (8), 25.50 (1) (d), 49.45 (2) (a) 3., 71.26
7(1) (be), 77.54 (9a) (a), 101.055 (2) (a), 230.03 (3), 230.80 (4), 230.90 (1) (c) and
8635.18 (1); to repeal and recreate 230.03 (3); and to create 13.94 (1) (dj),
913.94 (1s) (c) 9., 40.02 (54) (n), 70.11 (41c) and chapter 636 of the statutes;
10relating to: the Badger Health Benefit Authority, health benefit exchange
11operation, granting rule-making authority, and providing a penalty.
Analysis by the Legislative Reference Bureau
Badger Health Benefit Authority
This bill creates the Badger Health Benefit Authority (authority) that is a
public body corporate and politic that is created by state law but that is not a state

agency. The authority is governed by a board of directors consisting of the
commissioner of insurance (commissioner), the secretary of employee trust funds,
the director of the state Medical Assistance program, the executive directors of the
Wisconsin Collaborative for Healthcare Quality and the Wisconsin Health
Information Organization, and the following members who are nominated by the
governor, and with the advice and consent of the senate appointed, for three-year
terms: a member in good-standing of the American Academy of Actuaries, a health
economist, an employee benefits specialist, a representative of small employers, a
representative of an organization that represents consumer interests, a
representative of organized labor, and an individual with experience in health care
administration. The chairperson of the board is the commissioner. The board must
appoint an executive director of the authority. The executive director must, among
other duties, supervise the administrative affairs and general management and
operation of the authority, employ professional and clerical staff, as necessary, and
prepare the authority's annual budget.
The authority is not a state agency, so numerous laws that apply to state
agencies do not apply to the authority. However, the authority is treated like a state
agency in the following ways, among others: it is subject to auditing by the
Legislative Audit Bureau; it is subject to open meeting and open records laws; and
it is exempt from property tax, income tax, and sales and uses taxes. The authority
has powers, including adopting bylaws and policies and procedures for the
regulation of its affairs and conduct of its business; hiring employees; incurring debt;
suing and being sued in its own name; and executing contracts. The bill establishes
a process that the authority must use when it contracts for professional services.
Under the bill, the authority is subject to civil liability for its acts or omissions except
that the maximum amount recoverable in a civil action against the authority is
$100,000. However, a member of the authority's board of directors, the authority's
executive director, or an authority employee is exempt from civil liability unless the
member, director, or employee acted with willful misconduct or in intentional
violation of the law. The bill also imposes restrictions on board members and the
authority's executive director pertaining to conflicts of interest and requires board
members and the executive director to file financial disclosures.
Health benefit exchange
Under the bill, the authority must establish and operate a Wisconsin Health
Benefit Exchange in this state, must make qualified health plans, with effective
dates on or before January 1, 2016, available to qualified individuals and qualified
employers, and must seek federal grants and other funding for the purpose of the
exchange. A qualified health plan is defined in the bill, generally, as a health benefit
plan that covers the costs of health care services and that meets the certification
criteria described in the federal Patient Protection and Affordable Care Act
(PPACA). A qualified individual is defined in the bill, generally, as a citizen or
national of the United States, or an alien lawfully present in the United States, who
is not imprisoned in a correctional facility and who resides in this state. A qualified
employer is defined in the bill, generally, as an employer with not more than 100
employees (small employer) that either: 1) has its principal place of business in this

state and elects to provide coverage to all of its eligible employees, wherever
employed, through the small business health options program component of the
exchange (SHOP Exchange) established by the authority; or 2) elects to provide
coverage through the SHOP Exchange to all of its eligible employees who are
principally employed in this state.
Only health benefit plans that are certified by the authority as qualified health
plans may be offered through the exchange. To be certified as a qualified health plan,
a health benefit plan must provide the essential health benefits package described
in PPACA, its premium rates and contract language must have been filed with and
not disapproved by the commissioner, it must provide at least a bronze level of
coverage, as determined by the authority in accordance with criteria developed by
the secretary of the federal Department of Health and Human Services (federal
secretary), its cost-sharing must not exceed limits established in PPACA, the insurer
offering it must meet specified criteria, and the authority must determine that
making the plan available through the exchange is in the interest of qualified
individuals and qualified employers in this state.
The authority must assign a rating to, and determine the level of coverage of,
each qualified health plan offered through the exchange. The levels of coverage
under PPACA are bronze, silver, gold, and platinum, and are based on what
percentage of the full actuarial value of the benefits provided under the plan the
benefits under the plan provides. An eligible employee of a qualified employer that
provides coverage through the SHOP Exchange may enroll in any qualified health
plan offered through the SHOP Exchange at the level of coverage specified by his or
her employer.
After the exchange begins operating, no insurer may offer or issue health
benefit plan coverage in this state to an individual or a small employer except
through the exchange. Although any insurer that is authorized to do business in this
state in one or more lines of insurance that includes health insurance may offer
qualified health plans through the exchange, a health benefit plan may not be
certified as a qualified health plan unless the insurer that offers it, among other
things, is in good standing, charges the same premium for the plan regardless of
whether it is offered directly by the insurer or through an insurance intermediary,
offers through the exchange at least one qualified health plan in each of the silver
and gold levels of coverage, and complies with regulations of the federal secretary
and any other requirements established by the authority. In addition, any insurer
that seeks certification of a health benefit plan as a qualified health plan must
provide a justification for any premium increase; must make specified information
available to the public, such as data on enrollment and on the number of claims
denied, claims payment policies and practices, and financial disclosures; and must
permit individuals enrolled in the plan to learn the amount that an individual would
be responsible for paying toward the cost of a specific item or service.
An insurer that offers coverage through the exchange must establish a toll-free
hotline for providing information to enrollees and must pay a commission,
determined by the authority, to an insurance intermediary who enrolls a qualified
individual or employees of a qualified employer in a qualified health plan offered by

the insurer through the exchange. For determining premiums, an insurer that offers
coverage through the exchange may pool together all individuals and employees with
coverage under all of the plans issued by the insurer through the exchange. To pay
administrative expenses of the exchange, the authority may impose on each insurer
offering plans through the exchange a surcharge that is based on the insurer's total
premium or flat dollar amount per enrollee collected through the exchange.
The bill sets out numerous responsibilities for the authority with respect to the
exchange. In addition to the administrative duties related to certifying and rating
health benefit plans and enrolling qualified individuals and qualified employers, the
authority must provide for the operation of a toll-free telephone hotline to respond
to requests for assistance; establish an appeals process; establish and operate a
service center to provide information; publicize the exchange; maintain an Internet
site with comparative information about qualified health plans; screen applicants for
eligibility for Medical Assistance (MA) and, if eligible, assist them to enroll in MA;
select, and award grants to, entities to serve as navigators for conducting public
education activities and distributing information about, and facilitating enrollment
in, qualified health plans; review the rate of premium growth within the exchange
and outside of the exchange; and develop recommendations on whether qualified
employers should be limited to small employers. The authority may establish risk
adjustment mechanisms for the exchange, contract with a third-party
administrator for services on behalf of the exchange, and establish sub-exchanges
or other exchanges provided for under federal law. The authority must keep an
accounting of all exchange-related activities and receipts and expenditures and
annually submit a report of the accounting to the federal secretary, the governor, the
commissioner, and the legislature.
The commissioner may promulgate rules related to the implementation of the
exchange and must develop a standard application form for use in the exchange.
Because this bill creates a new crime or revises a penalty for an existing crime,
the Joint Review Committee on Criminal Penalties may be requested to prepare a
report concerning the proposed penalty and the costs or savings that are likely to
result if the bill is enacted.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB107,1 1Section 1. 1.12 (1) (b) of the statutes is amended to read:
SB107,5,32 1.12 (1) (b) "State agency" means an office, department, agency, institution of
3higher education, the legislature, a legislative service agency, the courts, a judicial
4branch agency, an association, society, or other body in state government that is

1created or authorized to be created by the constitution or by law, for which
2appropriations are made by law, excluding the Badger Health Benefit Authority and
3the Wisconsin Economic Development Corporation.
SB107,2 4Section 2. 13.172 (1) of the statutes is amended to read:
SB107,5,105 13.172 (1) In this section, "agency" means an office, department, agency,
6institution of higher education, association, society, or other body in state
7government created or authorized to be created by the constitution or any law, that
8is entitled to expend moneys appropriated by law, including the legislature and the
9courts, and any authority created in subch. II of ch. 114 or subch. III of ch. 636 or in
10ch. 231, 233, 234, 238, or 279.
SB107,3 11Section 3. 13.62 (2) of the statutes is amended to read:
SB107,5,1612 13.62 (2) "Agency" means any board, commission, department, office, society,
13institution of higher education, council, or committee in the state government, or any
14authority created in subch. II of ch. 114 or subch. III of ch. 636 or in ch. 231, 232, 233,
15234, 237, 238, or 279, except that the term does not include a council or committee
16of the legislature.
SB107,4 17Section 4. 13.94 (1) (dj) of the statutes is created to read:
SB107,5,2218 13.94 (1) (dj) At least once every 2 years, perform a financial audit and
19performance evaluation audit of any health benefit plan exchange under subch. II
20of ch. 636 and an audit of the Badger Health Benefit Authority's policies and
21management practices and file copies of each audit report under this paragraph with
22the distributees specified in par. (b).
SB107,5 23Section 5. 13.94 (1s) (c) 9. of the statutes is created to read:
SB107,5,2524 13.94 (1s) (c) 9. The Badger Health Benefit Authority for the cost of the audit
25under sub. (1) (dj).
SB107,6
1Section 6. 13.95 (intro.) of the statutes is amended to read:
SB107,6,14 213.95 Legislative fiscal bureau. (intro.) There is created a bureau to be
3known as the "Legislative Fiscal Bureau" headed by a director. The fiscal bureau
4shall be strictly nonpartisan and shall at all times observe the confidential nature
5of the research requests received by it; however, with the prior approval of the
6requester in each instance, the bureau may duplicate the results of its research for
7distribution. Subject to s. 230.35 (4) (a) and (f), the director or the director's
8designated employees shall at all times, with or without notice, have access to all
9state agencies, the University of Wisconsin Hospitals and Clinics Authority, the
10Wisconsin Aerospace Authority, the Badger Health Benefit Authority, the Lower Fox
11River Remediation Authority, the Wisconsin Economic Development Corporation,
12and the Fox River Navigational System Authority, and to any books, records, or other
13documents maintained by such agencies or authorities and relating to their
14expenditures, revenues, operations, and structure.
SB107,7 15Section 7. 16.002 (2) of the statutes is amended to read:
SB107,6,2016 16.002 (2) "Departments" means constitutional offices, departments, and
17independent agencies and includes all societies, associations, and other agencies of
18state government for which appropriations are made by law, but not including
19authorities created in subch. II of ch. 114 or subch. III of ch. 636 or in ch. 231, 232,
20233, 234, 237, 238, or 279.
SB107,8 21Section 8. 16.004 (4) of the statutes is amended to read:
SB107,7,222 16.004 (4) Freedom of access. The secretary and such employees of the
23department as the secretary designates may enter into the offices of state agencies
24and authorities created under subch. II of ch. 114 and subch. III of ch. 636 and under
25chs. 231, 233, 234, 237, 238, and 279, and may examine their books and accounts and

1any other matter that in the secretary's judgment should be examined and may
2interrogate the agency's employees publicly or privately relative thereto.
SB107,9 3Section 9. 16.004 (5) of the statutes is amended to read:
SB107,7,84 16.004 (5) Agencies and employees to cooperate. All state agencies and
5authorities created under subch. II of ch. 114 and subch. III of ch. 636 and under chs.
6231, 233, 234, 237, 238, and 279, and their officers and employees, shall cooperate
7with the secretary and shall comply with every request of the secretary relating to
8his or her functions.
SB107,10 9Section 10. 16.004 (12) (a) of the statutes is amended to read:
SB107,7,1710 16.004 (12) (a) In this subsection, "state agency" means an association,
11authority, board, department, commission, independent agency, institution, office,
12society, or other body in state government created or authorized to be created by the
13constitution or any law, including the legislature, the office of the governor, and the
14courts, but excluding the University of Wisconsin Hospitals and Clinics Authority,
15the Wisconsin Aerospace Authority, the Lower Fox River Remediation Authority, the
16Wisconsin Economic Development Corporation, the Badger Health Benefit
17Authority,
and the Fox River Navigational System Authority.
SB107,11 18Section 11. 16.045 (1) (a) of the statutes is amended to read:
SB107,7,2419 16.045 (1) (a) "Agency" means an office, department, independent agency,
20institution of higher education, association, society, or other body in state
21government created or authorized to be created by the constitution or any law, that
22is entitled to expend moneys appropriated by law, including the legislature and the
23courts, but not including an authority created in subch. II of ch. 114 or subch. III of
24ch. 636
or in ch. 231, 232, 233, 234, 237, 238, or 279.
SB107,12 25Section 12. 16.15 (1) (ab) of the statutes is amended to read:
SB107,8,4
116.15 (1) (ab) "Authority" has the meaning given under s. 16.70 (2), but
2excludes the University of Wisconsin Hospitals and Clinics Authority, the Lower Fox
3River Remediation Authority, and the Wisconsin Economic Development
4Corporation, and the Badger Health Benefit Authority.
SB107,13 5Section 13. 16.41 (4) of the statutes is amended to read:
SB107,8,76 16.41 (4) In this section, "authority" means a body created under subch. II of
7ch. 114 or subch. III of ch. 636 or under ch. 231, 233, 234, 237, 238, or 279.
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