Local and Municipal Health Care Choice Act of 2017

To amend title XXVII of the Public Health Service Act to permit cooperative governing of public entity health benefits through local governments in secondary States. 1. Short title This Act may be cited as the Local and Municipal Health Care Choice Act of 2017 2. Cooperative governing of public entity group health coverage Title XXVII of the Public Health Service Act ( 42 U.S.C. 300gg (1) by redesignating the section 2794 ( 42 U.S.C. 300gg–95 (2) by adding at the end the following new section: 2796. Authority to offer public entity group health coverage to local governments in a secondary State (a) In general A local government in a secondary State (as defined in subsection (h)(7)) may provide group health coverage to its officers, employees, or retirees (and their dependents) through a local government employee health benefits pool or program authorized under the laws of a primary State, subject to the provisions of this section. (b) Eligibility for multistate activity A local government employee health benefits pool or program shall be eligible to offer group health coverage to officials, employees, and retirees (and their dependents) of a local government located in a secondary State through an interlocal agreement with such local government, or as approved by an applicable State authority in such secondary State, unless— (1) in the case of a pool or program that primarily serves municipal officers, employees, or retirees (and their dependents), an objection is made to the offering of such coverage by the municipal league or association located in the secondary State within 90 days of the date on which the authority is granted or an interlocal agreement is executed; or (2) in the case of a pool or program that primarily serves county officers, employees, retirees (and their dependents), an objection is made to the offering of such coverage by the county association located in the secondary State within 90 days of the date on which the authority is granted or an interlocal agreement is executed. (c) Application of covered laws of primary State The covered laws (as defined in subsection (h)(2)) of the primary State shall apply to group health coverage offered by a local government employee health benefits pool or program in the primary State and in any secondary State, but only if the coverage and the pool or program comply with the conditions of this section with respect to the offering of coverage in any secondary State. (d) Limited application of secondary State laws (1) In general Except as provided in this section, a local government employee health benefits pool or program that offers group health coverage in a secondary State to the officers, employees, or retirees (and their dependents) of a local government located in such secondary State, is exempt from any covered laws of the secondary State (and any rules, regulations, agreements, or orders sought or issued by such State under or related to such covered laws). (2) Secondary State authority A secondary State may require a local government employee health benefits pool or program to do any or all of the following: (A) Registration To register with an applicable State authority in such State with jurisdiction over local government employee health benefits pools or programs and designate such authority as its agent solely for the purpose of receiving service of legal documents or process. (B) Documentation To file with an applicable State authority in such State— (i) a written intent to do business in that State; (ii) copies of the membership or interlocal agreements entered into between the local government employee health benefits pool or program and a local government of that State; and (iii) copies of annual audited financial statements of the local government employee health benefits pool or program filed with the primary State. (C) Compliance with injunctions To comply with an injunction issued by a court of competent jurisdiction, upon a petition by an applicable State authority in such State alleging that the pool or program is in hazardous financial condition. (D) Compliance with State fraud and abuse laws To comply with any State law regarding fraud and abuse, except that if the State seeks an injunction regarding the conduct described in this subparagraph, such injunction must be obtained from a court of competent jurisdiction. (E) Compliance with State unfair claims settlement practices laws To comply with any State law regarding unfair claims settlement practices. (3) Limitations on secondary State authority If a local government employee health benefits pool or program offers group health insurance coverage to officials, employees, and retirees (and their dependents) of a local government located in a secondary State pursuant to subsection (b), such secondary State may not do any of the following: (A) Countersigned by local agent or broker Require any group health coverage issued by the pool or program to be countersigned by an insurance agent or broker residing in that secondary State. (B) Submit to duplicative financial examinations Require the pool or program to submit to an examination of its financial condition by an applicable State authority in such State, unless— (i) an applicable State authority of the primary State has not done an examination within the period recommended by the National Association of Insurance Commissioners; and (ii) any such examination by the secondary State is conducted in accordance with the examiners’ handbook of the National Association of Insurance Commissioners and is coordinated to avoid unjustified duplication and unjustified repetition. (C) Discriminate against pool or program Otherwise discriminate against the pool or program issuing group health coverage in both the primary State and in any secondary State. (e) Disclosure requirement Prior to providing group health coverage to the officers, employees, or retirees (and their dependents) of a local government located in a secondary State, a local government employee health benefits pool or program shall provide notice to such individuals that the health coverage is governed by the covered laws and regulations of the primary State, as well as by any applicable Federal laws and regulations. (f) Status of group health coverage in secondary State A local government employee health benefits pool or program that is not regulated as an insurer in its primary State, and whose group health plans are not regulated as insurance in its primary State, shall not be subject to the jurisdiction of a State insurance regulatory agency in any secondary State. (g) Designation of primary State (1) Designation of a single State A local government employee health benefits pool or program may only designate one State as its primary State with respect to all such coverage it offers under this section. (2) Initial operations in primary State Such pool or program may not offer group health coverage in a secondary State until it is deemed to be doing business in the primary State. (h) Definitions In this section: (1) Applicable State authority The term applicable State authority (2) Covered laws (A) In general The term covered laws (i) Group health coverage issued by a local government employee health benefits pool or program. (ii) The offer, sale, rating (including medical underwriting), renewal, and issuance of group health coverage to local government officials, employees, and retirees or their dependents. (iii) The management, operations, and investment activities of a local government employee health benefits pool or program. (iv) Loss control and claims administration for a local government employee health benefits pool or program with respect to liability for which the pool or program provides coverage. (v) The payment, on a nondiscriminatory basis, of applicable premium and other taxes (including high risk pool assessments) which are levied on health insurance issuers, brokers, or policyholders under the laws of the State. (B) Exception Such term does not include any law, rule, regulation, agreement, or order governing the use of care or cost management techniques, including any requirement related to provider contracting, network access or adequacy, health care data collection, or quality assurance. (3) Group health coverage The term group health coverage (4) Local government The term local government (5) Local government employee health benefits pool or program The term local government employee health benefits pool or program (A) a local government or group of local governments, directly or through a pool, provide health care benefits primarily for local government officials, employees, and retirees and their dependents; and (B) such pool may provide health care benefits from the assets of the pool or its member local governments through any combination of self-funded arrangements or fully insured products, and includes any other State authorized program designed to provide health benefits to local government officials, employees, and retirees and their dependents. (6) Primary State The term primary State (7) Secondary State The term secondary State .

Summary: Local and Municipal Health Care Choice Act of 2017 This bill amends the Public Health Service Act to authorize a local government in a secondary state to provide group health coverage to its officers, employees, or retirees and their dependents through a local government employee health benefits pool or program authorized under the laws of a primary state unless the municipal league, municipal association, or county association in the secondary state objects. Such pools and programs must do business in the primary state. Such pools and programs are subject to the primary state's laws, rules, regulations, agreements, and orders pertaining to: group health coverage issued by such a pool or program; the offer, sale, rating, renewal, and issuance of group health coverage to local government officials, employees, or retirees and their dependents; the management, operations, and investment activities of such a pool or program; loss control and claims administration for such a pool or program; or payment of taxes levied on health insurance issuers, brokers, or policyholders. Such pools and programs are exempt from these policies of the secondary state. These policies do not include policies governing the use of care or cost management techniques. The policies of the primary state must apply to such pools and programs in both the primary state and secondary state. Secondary states may require such a pool or program to: (1) register with the state, (2) comply with certain court injunctions, or (3) comply with state laws regarding fraud and abuse or unfair claims settlement practices.