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					                                  South Carolina General Assembly
                                      118th Session, 2009-2010

S. 998

STATUS INFORMATION

General Bill
Sponsors: Senators Rose and S. Martin
Document Path: l:\s-res\mtr\040affo.ebd.mtr.docx

Introduced in the Senate on January 12, 2010
Currently residing in the Senate Committee on Banking and Insurance

Summary: Affordable Health Insurance Act


HISTORY OF LEGISLATIVE ACTIONS

    Date     Body     Action Description with journal page number
 12/9/2009   Senate   Prefiled
 12/9/2009   Senate   Referred to Committee on Banking and Insurance
 1/12/2010   Senate   Introduced and read first time SJ-51
 1/12/2010   Senate   Referred to Committee on Banking and Insurance SJ-51


VERSIONS OF THIS BILL

12/9/2009
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 9                              A BILL
10
11   TO AMEND TITLE 38 OF THE 1976 CODE, BY ADDING
12   CHAPTER 110, TO CREATE THE “AFFORDABLE HEALTH
13   INSURANCE ACT”, TO PROVIDE THAT HEALTH
14   INSURERS MAY OPERATE CERTAIN PROGRAMS
15   WITHOUT VIOLATING UNFAIR TRADE PRACTICE LAWS,
16   TO PROVIDE THAT NO RELATIONSHIP MUST EXIST
17   BETWEEN PREFERRED PROVIDER AND NON-PREFERRED
18   PROVIDER PLAN REIMBURSEMENTS, TO PROVIDE THAT
19   THE DEPARTMENT OF INSURANCE SHALL ALLOW
20   HEALTH REIMBURSEMENT ARRANGEMENT PLANS, TO
21   PROVIDE EXCEPTIONS TO THE ALLOWANCE OF HEALTH
22   REIMBURSEMENT ARRANGEMENT PLANS, AND TO
23   PROVIDE FOR INCOME TAX EXEMPTIONS FOR
24   PREMIUMS PAID TO A HIGH DEDUCTIBLE HEALTH
25   PLAN.
26
27   Be it enacted by the General Assembly of the State of South
28   Carolina:
29
30   SECTION 1. This act may be cited as the “Affordable Health
31   Insurance Act.”
32
33   SECTION 2. Title 38 of the 1976 Code is amended by adding:
34
35                             “Chapter 110
36
37                    Affordable Health Insurance Act
38
39     Section 38-110-10. Insurers that include and operate wellness
40   and health promotion programs, disease and condition
41   management programs, health risk appraisal programs, and similar
42   provisions in their high deductible health policies in keeping with

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 1   federal requirements shall not be considered to be engaging in
 2   unfair trade practices under South Carolina law with respect to
 3   references to the practices of illegal inducements, unfair
 4   discrimination, and rebating.
 5
 6      Section 38-110-20. (A) There shall be no required
 7   relationship between preferred provider and non-preferred provider
 8   plan reimbursements for Health Savings Account eligible high
 9   deductible plans using non-preferred provider reimbursements.
10   These plans, however, shall not:
11         (1) unfairly deny health benefits for medically necessary
12   covered services;
13         (2) have differences in benefit levels payable to preferred
14   providers compared to other providers that unfairly deny benefits
15   for covered services;
16         (3) have a plan coinsurance percentage applicable to benefit
17   levels for services provided by non-preferred providers that is less
18   than sixty percent of the benefit levels under the policy for such
19   services; or
20         (4) have an adverse effect on the availability or the quality
21   of services.
22
23      Section 38-110-30. (A) The Department of Insurance shall be
24   authorized to allow Health Reimbursement Arrangement only
25   plans that encourage employer financial support of health
26   insurance or health related expenses recognized under the rules of
27   the federal Internal Revenue Service.
28        (B) Health Reimbursement Arrangement only plans that are
29   not sold in connection with or packaged with health insurance
30   coverage shall not be considered insurance under the laws of this
31   State.
32        (C) Individual health insurance policies funded through
33   Health Reimbursement Arrangement only plans shall not be
34   considered employer sponsored or group coverage under the laws
35   of this State, and nothing in this section shall be interpreted to
36   require an insurer to offer an individual health insurance policy for
37   sale in connection with or packaged with a Health Reimbursement
38   Arrangement only plan or to accept premiums from Health
39   Reimbursement Arrangement only plans for individual health
40   insurance policies.
41
42     Section 38-110-40. In addition to other deductions allowed by
43   law, a taxpayer in this State may deduct from his or her taxable

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 1   income for state income tax purposes an amount equal to one
 2   hundred percent of the premium paid by the taxpayer during the
 3   taxable year for high deductible health plans which are eligible to
 4   be used with a Health Savings Account under the applicable
 5   provisions of Section 223 of the Internal Revenue Code to the
 6   extent the deduction has not been included in federal adjusted
 7   gross income, as defined under the Internal Revenue Code of 1986,
 8   and the expenses have not been provided from a Health
 9   Reimbursement Arrangement and have not been included in
10   itemized non-business deductions that shall be excluded from such
11   taxpayer’s taxable income.
12
13      Section 38-110-50. (A) As used in this section:
14         (1) ‘Qualified health insurance’ means a high deductible
15   health plan that includes, at a minimum, catastrophic health care
16   coverage which is eligible to be used with a Health Savings
17   Account under the applicable provisions of Section 223 of the
18   Internal Revenue Code.
19         (2) ‘Qualified health insurance expense’ means the
20   expenditure of funds of at least two hundred fifty dollars annually
21   for health insurance premiums for qualified health insurance.
22         (3) ‘Taxpayer’ means an employer who employs directly, or
23   who pays compensation to individuals whose compensation is
24   reported on Federal Tax Form 1099, fifty or fewer persons and for
25   whom the taxpayer provides high deductible health plans that
26   include, at a minimum, catastrophic health care coverage which are
27   established and used with a Health Savings Account under the
28   applicable provisions of Section 223 of the Internal Revenue Code
29   and in which such employees are enrolled.
30      (B) Employers shall be allowed an income tax credit, for
31   qualified health insurance expenses in an amount of two hundred
32   fifty dollars for each employee enrolled for twelve consecutive
33   months in a qualified health insurance plan if the qualified health
34   insurance is made available to all of the employees and
35   compensated individuals of the employer pursuant to the
36   applicable provisions of Section 125 of the Internal Revenue Code.
37      (C) In no event shall the total amount of the tax credit under
38   this section for a taxable year exceed the taxpayer’s income tax
39   liability. Any unused tax credit shall be allowed the taxpayer
40   against succeeding years’ tax liability. No such credit shall be
41   allowed the taxpayer against a prior year’s tax liability.



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 1     (D) The Department of Revenue shall be authorized to
 2   promulgate any rules and regulations necessary to implement and
 3   administer the provisions of this section.
 4     (E) The credit allowed by this section shall apply only with
 5   regard to qualified health insurance expenses.
 6
 7      Section 38-110-60. (A) The Department of Insurance shall
 8   develop flexible guidelines for coverage and approval of Health
 9   Savings Account eligible high deductible plans which are designed
10   to qualify under federal and state requirements as high deductible
11   health plans for use with Health Savings Accounts which comply
12   with federal requirements under the applicable provisions of the
13   federal Internal Revenue Code for high deductible health plans
14   sold in connection with Health Savings Accounts.
15         (B) The department shall be authorized to encourage and
16   promote the marketing of Health Savings Account eligible high
17   deductible plans by accident and sickness insurers in this state;
18   provided, however, that nothing in this section shall be construed
19   to authorize the sale of insurance in violation of the requirements
20   of law relating to the transaction of insurance in this State or
21   prohibiting the interstate sale of insurance.
22         (C) The department shall be authorized to conduct a national
23   study of Health Savings Account eligible high deductible plans
24   available in other states and to determine if and how these products
25   serve the uninsured and if they should be made available to the
26   citizens of this State.
27         (D) The department shall be authorized to develop an
28   automatic or fast track approval process for Health Savings
29   Account eligible high deductible plans already approved under the
30   laws and regulations of this State or other states.
31         (E) The department shall be authorized to promulgate such
32   rules and regulations as he or she deems necessary and appropriate
33   for the design, promotion, and regulation of Health Savings
34   Account eligible high deductible plans, including rules and
35   regulations for the expedited review of standardized policies,
36   advertisements and solicitations, and other matters deemed
37   relevant by the commissioner.”
38
39   SECTION 3. This act takes effect upon approval by the Governor.
40                            ----XX----
41



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