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Committee approves SB 121 with amendment exempting certain self-funded public and church plans
Summary
Senate Bill 121, a technical insurance bill adopting NAIC model holding company system provisions and related accreditation items, was amended to restore a "material" threshold and to exempt specified self-funded employee health plans maintained by state and local governmental entities and certain church plans from being defined as health benefit
The Senate Committee on Financial Institutions and Insurance passed Senate Bill 121 as amended, adopting technical changes and adding exemptions for certain self-funded health plans.
Staff told the committee the bill authorizes the commissioner of insurance to adopt provisions related to group capital calculations and liquidity stress testing and incorporates elements of the National Association of Insurance Commissioners (NAIC) model holding company system regulatory act. A department-requested technical amendment restored the word "material" in a provision on page 14.
A lengthier second amendment inserted language to exempt from certain definitions in the Kansas Insurance Code self-funded health plans established or maintained for employees by the state or subdivisions of the state, school districts, public authorities, counties or cities, or other political subdivisions, and to exempt self-funded plans maintained by churches or conventions or associations of churches that are tax-exempt under section 501 of the Internal Revenue Code. Staff explained the amendment places the exemption language into the appropriate statutory sections (K.S.A. 40-202 and K.S.A. 40-4602) so those entities' self-funded plans would not be treated as "health benefit plans" for purposes addressed in the bill.
Senator Francisco moved the first (technical) amendment restoring "material," which passed by voice vote. Senator Gossage moved the fuller exemption amendment; Senator Cluess seconded and the committee approved it by voice vote. Senator Gossage later moved that the bill, as amended, be passed favorably for passage out of committee; Senator Fagg seconded and the motion carried by voice vote.
The committee record shows testimony and stakeholder outreach prompted the exemption language; staff identified hospitals and other self-funded entities as having raised concerns that the amendment was intended to address. The committee did not record a roll-call tally in the transcript; actions were approved by voice vote.
SB 121 will be forwarded to the floor for further consideration.
