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LRB-3762/1
TJD:amn
2017 - 2018 LEGISLATURE
July 19, 2017 - Introduced by Representatives Sargent, Anderson, Berceau,
Brostoff, Considine, Crowley, Hebl, Kessler, Kolste, Ohnstad, Pope,
Shankland, Sinicki, Subeck, C. Taylor and Zamarripa, cosponsored by
Senators Larson, Carpenter, Hansen, Johnson, Miller and Vinehout.
Referred to Committee on Insurance.
AB445,1,11 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) (am), 16.75 (8) (bm), 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); and to create 13.94 (1) (dj), 13.94 (1s) (c) 9., 40.02 (54) (n), 70.11 (41c)
9and chapter 636 of the statutes; relating to: the Badger Health Benefit
10Authority, health benefit exchange operation, granting rule-making authority,
11and providing a criminal penalty.
Analysis by the Legislative Reference Bureau
This bill requires the establishment and operation of a Wisconsin Health
Benefit Exchange, which is administered by the Badger Health Benefit Authority
that is also created in the bill.

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, 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, 2018, 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 a small employer with not more than 100
employees 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, 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 DHHS 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 and, if eligible, assist them to enroll in Medical
Assistance; 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 DHHS, the governor, the
commissioner, and the legislature.
This proposal may contain a health insurance mandate requiring a social and
financial impact report under s. 601.423, stats.
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:
AB445,1 1Section 1. 1.12 (1) (b) of the statutes is amended to read:
AB445,5,32 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.
AB445,2 4Section 2. 13.172 (1) of the statutes is amended to read:
AB445,5,105 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.
AB445,3 11Section 3. 13.62 (2) of the statutes is amended to read:
AB445,5,1612 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.
AB445,4 17Section 4. 13.94 (1) (dj) of the statutes is created to read:
AB445,5,2218 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).
AB445,5 23Section 5. 13.94 (1s) (c) 9. of the statutes is created to read:
AB445,5,2524 13.94 (1s) (c) 9. The Badger Health Benefit Authority for the cost of the audit
25under sub. (1) (dj).
AB445,6
1Section 6. 13.95 (intro.) of the statutes is amended to read:
AB445,6,14 213.95 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.
AB445,7 15Section 7. 16.002 (2) of the statutes is amended to read:
AB445,6,2016 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.
AB445,8 21Section 8. 16.004 (4) of the statutes is amended to read:
AB445,7,222 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.
AB445,9 3Section 9. 16.004 (5) of the statutes is amended to read:
AB445,7,84 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.
AB445,10 9Section 10. 16.004 (12) (a) of the statutes is amended to read:
AB445,7,1710 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.
AB445,11 18Section 11. 16.045 (1) (a) of the statutes is amended to read:
AB445,7,2419 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.
AB445,12 25Section 12. 16.15 (1) (ab) of the statutes is amended to read:
AB445,8,4
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.
AB445,13 5Section 13. 16.41 (4) of the statutes is amended to read:
AB445,8,76 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.
AB445,14 8Section 14. 16.417 (1) (a) of the statutes is amended to read:
AB445,8,139 16.417 (1) (a) “Agency" means an office, department, independent agency,
10institution of higher education, association, society, or other body in state
11government created or authorized to be created by the constitution or any law, that
12is entitled to expend moneys appropriated by law, including the legislature and the
13courts, but not including an authority or the body created under subch. III of ch. 636.
AB445,15 14Section 15. 16.52 (7) of the statutes is amended to read:
AB445,8,2415 16.52 (7) Petty cash account. With the approval of the secretary, each agency
16that is authorized to maintain a contingent fund under s. 20.920 may establish a
17petty cash account from its contingent fund. The procedure for operation and
18maintenance of petty cash accounts and the character of expenditures therefrom
19shall be prescribed by the secretary. In this subsection, “agency" means an office,
20department, independent agency, institution of higher education, association,
21society, or other body in state government created or authorized to be created by the
22constitution or any law, that is entitled to expend moneys appropriated by law,
23including the legislature and the courts, but not including an authority created in
24subch. II of ch. 114 or subch. III of ch. 636 or in ch. 231, 233, 234, 237, 238, or 279.
AB445,16 25Section 16. 16.528 (1) (a) of the statutes is amended to read:
AB445,9,6
116.528 (1) (a) “Agency" means an office, department, independent agency,
2institution of higher education, association, society, or other body in state
3government created or authorized to be created by the constitution or any law, that
4is entitled to expend moneys appropriated by law, including the legislature and the
5courts, but not including an authority created in subch. II of ch. 114 or subch. III of
6ch. 636
or in ch. 231, 233, 234, 237, 238, or 279.
AB445,17 7Section 17. 16.53 (2) of the statutes is amended to read:
AB445,9,168 16.53 (2) Improper invoices. If an agency receives an improperly completed
9invoice, the agency shall notify the sender of the invoice within 10 working days after
10it receives the invoice of the reason it is improperly completed. In this subsection,
11“agency" means an office, department, independent agency, institution of higher
12education, association, society, or other body in state government created or
13authorized to be created by the constitution or any law, that is entitled to expend
14moneys appropriated by law, including the legislature and the courts, but not
15including an authority created in subch. II of ch. 114 or subch. III of ch. 636 or in ch.
16231, 233, 234, 237, 238, or 279.
AB445,18 17Section 18. 16.54 (9) (a) 1. of the statutes is amended to read:
AB445,9,2318 16.54 (9) (a) 1. “Agency" means an office, department, independent agency,
19institution of higher education, association, society or other body in state
20government created or authorized to be created by the constitution or any law, which
21is entitled to expend moneys appropriated by law, including the legislature and the
22courts, but not including an authority created in subch. II of ch. 114 or subch. III of
23ch. 636
or in ch. 231, 233, 234, 237, 238, or 279.
AB445,19 24Section 19. 16.70 (2) of the statutes is amended to read:
AB445,10,2
116.70 (2) “Authority" means a body created under subch. II of ch. 114 or subch.
2III of ch. 636
or under ch. 231, 232, 233, 234, 237, or 279.
AB445,20 3Section 20. 16.72 (2) (e) (intro.) of the statutes is amended to read:
AB445,10,134 16.72 (2) (e) (intro.) In writing the specifications under this subsection, the
5department and any other designated purchasing agent under s. 16.71 (1) shall
6incorporate requirements for the purchase of products made from recycled materials
7and recovered materials if their use is technically and economically feasible. Each
8authority other than the University of Wisconsin Hospitals and Clinics Authority
9and, the Lower Fox River Remediation Authority, and the Badger Health Benefit
10Authority,
in writing specifications for purchasing by the authority, shall incorporate
11requirements for the purchase of products made from recycled materials and
12recovered materials if their use is technically and economically feasible. The
13specifications shall include requirements for the purchase of the following materials:
AB445,21 14Section 21. 16.72 (2) (f) of the statutes is amended to read:
AB445,10,2415 16.72 (2) (f) In writing specifications under this subsection, the department,
16any other designated purchasing agent under s. 16.71 (1), and each authority other
17than the University of Wisconsin Hospitals and Clinics Authority and, the Lower Fox
18River Remediation Authority, and the Badger Health Benefit Authority shall
19incorporate requirements relating to the recyclability and ultimate disposition of
20products and, wherever possible, shall write the specifications so as to minimize the
21amount of solid waste generated by the state, consistent with the priorities
22established under s. 287.05 (12). All specifications under this subsection shall
23discourage the purchase of single-use, disposable products and require, whenever
24practical, the purchase of multiple-use, durable products.
AB445,22 25Section 22. 16.75 (1m) of the statutes is amended to read:
AB445,11,14
116.75 (1m) The department shall award each order or contract for materials,
2supplies, or equipment on the basis of life cycle cost estimates, whenever such action
3is appropriate. Each authority other than the University of Wisconsin Hospitals and
4Clinics Authority, the Lower Fox River Remediation Authority, and the Wisconsin
5Aerospace Authority, and the Badger Health Benefit Authority shall award each
6order or contract for materials, supplies, or equipment on the basis of life cycle cost
7estimates, whenever such action is appropriate. The terms, conditions , and
8evaluation criteria to be applied shall be incorporated in the solicitation of bids or
9proposals. The life cycle cost formula may include, but is not limited to, the
10applicable costs of energy efficiency, acquisition and conversion, money,
11transportation, warehousing and distribution, training, operation and maintenance
12and disposition or resale. The department shall prepare documents containing
13technical guidance for the development and use of life cycle cost estimates, and shall
14make the documents available to local governmental units.
AB445,23 15Section 23. 16.75 (8) (am) of the statutes is amended to read:
AB445,11,2216 16.75 (8) (am) The department, any other designated purchasing agent under
17s. 16.71 (1), any agency making purchases under s. 16.74, and each authority other
18than the University of Wisconsin Hospitals and Clinics Authority and, the Lower Fox
19River Remediation Authority, and the Badger Health Benefit Authority shall, to the
20extent practicable, make purchasing selections using specifications developed under
21s. 16.72 (2) (e) to maximize the purchase of materials utilizing recycled materials and
22recovered materials.
AB445,24 23Section 24. 16.75 (8) (bm) of the statutes is amended to read:
AB445,12,424 16.75 (8) (bm) Each agency and authority other than the University of
25Wisconsin Hospitals and Clinics Authority and, the Lower Fox River Remediation

1Authority, and the Badger Health Benefit Authority shall ensure that the average
2recycled or recovered content of all paper purchased by the agency or authority
3measured as a proportion, by weight, of the fiber content of paper products purchased
4in a fiscal year, is not less than 40 percent of all purchased paper.
AB445,25 5Section 25. 16.75 (9) of the statutes is amended to read:
AB445,12,116 16.75 (9) The department, any other designated purchasing agent under s.
716.71 (1), any agency making purchases under s. 16.74, and any authority other than
8the University of Wisconsin Hospitals and Clinics Authority and, the Lower Fox
9River Remediation Authority, and the Badger Health Benefit Authority shall, to the
10extent practicable, make purchasing selections using specifications prepared under
11s. 16.72 (2) (f).
AB445,26 12Section 26. 16.765 (1) of the statutes is amended to read:
AB445,12,2313 16.765 (1) Contracting agencies, the University of Wisconsin Hospitals and
14Clinics Authority, the Fox River Navigational System Authority, the Wisconsin
15Aerospace Authority, the Badger Health Benefit Authority, the Lower Fox River
16Remediation Authority, the Wisconsin Economic Development Corporation, and the
17Bradley Center Sports and Entertainment Corporation shall include in all contracts
18executed by them a provision obligating the contractor not to discriminate against
19any employee or applicant for employment because of age, race, religion, color,
20handicap, sex, physical condition, developmental disability as defined in s. 51.01 (5),
21sexual orientation as defined in s. 111.32 (13m), or national origin and, except with
22respect to sexual orientation, obligating the contractor to take affirmative action to
23ensure equal employment opportunities.
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