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SENATE BILL 19

TH LEGISLATURE

- STATE OF NEW MEXICO -

SECOND SPECIAL SESSION

, 2008

INTRODUCED BY

Timothy Z. Jennings by request

AN ACT

RELATING TO HEALTH CARE REFORM; ENACTING THE HEALTH CARE

BENEFITS ACT; CREATING THE HEALTH CARE BENEFITS ADMINISTRATION;

CREATING THE HEALTHY NEW MEXICO FUND; TRANSFERRING

ADMINISTRATIVE AUTHORITY OF CERTAIN HEALTH COVERAGE PROGRAMS TO

THE HEALTH CARE BENEFITS ADMINISTRATION; PROVIDING FOR

TRANSITION OF ADMINISTRATIVE AUTHORITY OF CERTAIN HEALTH

COVERAGE PROGRAMS; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1

through 9 of this act may be cited as the "Health Care Benefits

Act".

Section 2. [NEW MATERIAL] DEFINITIONS.--As used in the

Health Care Benefits Act:

A. "administration" means the health care benefits

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administration;

B. "advocacy" means the act of promoting or

supporting efforts to provide health coverage or health care

services for individuals;

C. "affordability" means the designation of the

percentage or amount of income that a household should

reasonably be expected to devote to health care while still

having sufficient income to obtain access to other necessities;

D. "board" means the board of directors of the

administration;

E. "consumer" means an individual that obtains or

receives health care services from or through a provider;

F. "fund" means the healthy New Mexico fund;

G. "health insurer" means a person duly authorized

to transact the business of health insurance in the state,

including a nonprofit health care plan, a health maintenance

organization and self-insurers not subject to federal

preemption;

H. "payer" means a person that purchases health

care services directly from a provider or through a health

insurer or other third party;

I. "provider" means an individual practitioner, a

practitioner group, a facility or an institution duly licensed

or permitted by the state to provide health care services or

supplies;

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J. "tribal" means of or belonging to a tribe; and

K. "tribe" means a federally recognized Indian

nation, tribe or pueblo located wholly or partly in New Mexico.

Section 3. [NEW MATERIAL] HEALTH CARE BENEFITS

ADMINISTRATION--CREATION--BOARD--POWERS--DUTIES.--

A. The "health care benefits administration" is

created as an adjunct agency pursuant to Section 9-1-6 NMSA

1978. The administration shall be governed by a board of

directors.

B. The board shall consist of eleven voting members

as follows:

(1) three members appointed by the governor,

one of whom shall be a licensed physician pursuant to the

Medical Practice Act; one of whom shall be a nurse with a

graduate-level education in nursing; and one of whom shall have

at least three years' experience in health care finance,

economics or actuarial analysis;

(2) five members appointed by the New Mexico

legislative council, one from each of the five public

regulation commission districts and:

(a) one member shall be a Native

American;

(b) one member shall have at least three

years' experience in labor organization and advocacy;

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years' experience in health or human services advocacy;

(d) one member shall have at least three

years' executive-level experience in a business not related to

health care that employs ten or fewer individuals; and

(e) one member shall have at least three

years' executive-level experience in management or finance in a

business not related to health care;

(3) the secretary of health or the secretary's

designee;

(4) the secretary of human services or the

secretary's designee; and

(5) the superintendent of insurance or the

superintendent's designee.

C. The members appointed to the board shall have

terms chosen by lot as follows: two members shall serve

two-year terms; three members shall serve three-year terms; and

three members shall serve four-year terms. Thereafter,

appointed members shall serve four-year terms. An appointed

member shall serve until the member's successor is appointed,

but in no case shall the appointed member serve longer than an

additional twelve months. An appointed member shall not serve

more than two consecutive four-year terms.

D. A vacancy shall be filled by appointment by the

original appointing authority for the remainder of the

unexpired term.

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E. A majority of the eleven voting members shall

constitute a quorum. The board may allow members'

participation in meetings by telephone or other electronic

medium. Every odd-numbered year, the board shall elect its

chair and vice chair in open session from any of the appointed

members; provided, however, that the secretary of health, the

secretary of human services and the superintendent of insurance

or their designees shall not serve as chair or vice chair. A

chair or vice chair shall serve no more than two consecutive

two-year terms.

F. An appointed board member shall recuse the board

member's self in any proceeding in which the member:

(1) has a professional, personal, familial or

other intimate relationship that renders the member unable to

exercise the member's functions impartially;

(2) has a pecuniary interest in the outcome of

the proceeding; or

(3) has served as an attorney, advisor or

consultant in the matter before the board in previous

employment or contract.

G. The board may remove a member only for lack of

attendance, neglect of duty or malfeasance in office and in

accordance with policies adopted by the board.

H. A board member is entitled to receive per diem

and mileage in accordance with the Per Diem and Mileage Act.

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I. The board shall meet at least once per calendar

quarter. Unless otherwise indicated in the Health Care

Benefits Act, the board is subject to and shall comply with

statutes and rules applicable to state agencies, including the

Administrative Procedures Act; provided, however, that the

administration shall not promulgate rules unless specifically

provided that power by the legislature.

J. The board:

(1) shall create the following advisory

councils, each of which shall include representatives of

beneficiaries, providers, payers and insurers, to provide the

board with analyses and expert recommendations:

(a) a delivery system council;

(b) a cost containment and finance

council whose analyses shall include review of federal issues;

(d) a Native American health care

council; provided, however, that the administration may use an

existing Native American advisory council created by a health-

related state agency;

(2) may create other ad hoc advisory councils

representing beneficiaries, payers, providers, advocates and

other stakeholders; and

(3) shall, in creating any council, give due

consideration to the ethnic, economic and geographic diversity

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of the state.

K. At least once each year or as requested by the

board, each of the advisory councils created pursuant to

Paragraph (1) of Subsection J of this section shall present its

findings and make recommendations to the board on issues

requested by the board.

L. Prior to any action by the board, the findings

and recommendations of an advisory council presented to the

board for action shall be open for public comment for a period

of no less than thirty days. If an emergency requires action

in a time frame that will not accommodate the period for public

comment, any action of the board shall be temporary until such

time as the public comment period can occur.

Section 4. [NEW MATERIAL] EXECUTIVE DIRECTOR

APPOINTMENT.--From the effective date of the Health Care

Benefits Act through June 30, 2013, the governor, in

consultation with the board, shall appoint an executive

director of the administration, subject to confirmation by the

senate. The appointed executive director shall serve as

executive director-designee until the senate acts to confirm or

not to confirm the appointee.

Section 5. [NEW MATERIAL] HEALTH CARE BENEFITS

ADMINISTRATION--EXECUTIVE DIRECTOR QUALIFICATIONS AND DUTIES--

STAFF.--

A. The executive director shall have at least seven

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years of management or administrative experience in health care

delivery, policy, management, financing or coverage. The

executive director shall carry on the day-to-day operations of

the administration. The executive director is exempt from the

Personnel Act.

B. The executive director shall employ those

persons necessary to administer and implement the powers and

duties of the administration. The executive director may

contract with persons for professional services that require

specialized knowledge or expertise or that are for short-term

projects.

C. The executive director shall employ in a full-

time position a Native American liaison between the

administration and tribal communities and Native Americans

residing in the state.

D. The executive director shall organize the staff

into operational units to facilitate the administration's work,

including:

(1) a health analysis and research division;

(2) a plan management division;

(3) an outreach and education division; and

(4) an administrative services division.

Section 6. [NEW MATERIAL] HEALTH CARE BENEFITS

ADMINISTRATION--DUTIES.--The administration shall:

A. administer and manage health plans, benefits,

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programs, services products and funds for the provision of

coverage for small employers and public employees and retirees,

within available resources, including:

(1) making recommendations to the governor and

the legislature regarding safeguards to protect the financial

viability of funds dedicated to the health care needs of public

employees and retirees and other beneficiaries of health

coverage administered or overseen by the administration; and

(2) developing and administering transitional

or other health plans, benefits or services products to meet

the needs of individuals covered by the health plans

administered by the administration or individuals who are

awaiting coverage by public or private health plans for all or

some health conditions, within available resources;

B. by July 1, 2009, develop and present to the

governor and legislature proposed guidelines for:

(1) health plans, benefits or services that

may constitute health coverage for any requirement to show

proof of health coverage;

(2) affordability of health coverage that

factors in the amount or percentage of household income that

may reasonably be spent on health care, including guidelines

regarding premium assistance or other subsidies required to

make health coverage affordable at various household income

levels; and

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(3) a comprehensive health benefits or

services plan that defines optimal health coverage for persons

living in New Mexico, including varying benefit or service

plans and different patient cost-sharing models, taking into

consideration individuals who turn to prayer, ceremonies,

traditional healers or other spiritual or cultural practices

for healing and wellness;

C. by January 1, 2011, submit a written report to

the governor and legislature with findings and recommendations,

after consideration of actuarial, solvency, fiscal and data

analyses, and after public and stakeholder input, about whether

and, if recommended, how to consolidate any actuarial pools, in

whole or in part, that are administratively managed by the

administration;

D. by July 1, 2011, or as soon thereafter as

possible, subject to available appropriations and other

resources, and in consultation or in conjunction with the

insurance division of the public regulation commission, the

department of health, the human services department, the higher

education department or other appropriate state agency or

governing body, provide one or more reports to the governor,

the legislature and the public, including fiscal analyses or

legal or policy implications and recommendations regarding:

(1) the feasibility of the following:

(a) having the administration assume, or

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coordinate with the human services department on, the

management of health coverage programs pursuant to Title 19 or

Title 21 of the federal Social Security Act, where appropriate

and cost-effective for the beneficiaries of those programs and

the public payers;

(b) having the administration assume the

management of the medical insurance pool or coordinate with the

medical insurance pool; or

employers not otherwise eligible to purchase health coverage

pursuant to the Health Insurance Alliance Act or the Medical

Insurance Pool Act to purchase health coverage pursuant to the

Group Benefits Act or the at rates based on the employer

group's health status or claims experience but within the

experience rating limitations pursuant to the Small Group Rate

and Renewability Act;

(2) budgetary, regulatory or legislative

actions necessary to increase health care coverage, health care

access, health professional supply and quality of health care;

(3) methods to address trends, factors and

other elements to control health care costs, including methods

for increasing wellness, preventing disease, improving care of

persons with chronic health conditions and obtaining access to

innovative, efficacious and cost-effective pharmaceuticals to

help reduce demand for high-cost treatments and future costs;

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(4) data and information reporting

requirements for health insurers across all health product

lines to increase transparency and accountability, including

data regarding nonmedical costs of health coverage, separating

health insurers' profits from administrative expenses;

(5) portability of health coverage, including

the feasibility of developing a statewide insurance clearing

house or exchange function within the administration for groups

and individuals to purchase health coverage and for health

insurers to offer health coverage;

(6) performance standards for health insurers

and providers;

(7) quality of health care standards,

including a payment incentive for provider performance or to

improve health care outcomes;

(8) health care practitioner training,

recruitment and retention activities and incentives, including

incentives for increasing the number of primary and preventive

health care practitioners rather than specialty and

subspecialty care practitioners;

(9) the feasibility of and options for

implementing risk equalization processes that could spread risk

among health insurers that provide major medical policies to

minimize the adverse selection that can result from guaranteed

issue of health coverage products;

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(10) education and training programs for

health insurance brokers and agents that provide opportunities

for them to offer state-sponsored or state-funded health

coverage products;

(11) the implications of imposing a payroll

tax on all employers, whether offering employer-sponsored

insurance or not, to pay for or subsidize the costs of premiums

for persons unable to afford health coverage;

(12) federal laws, policies and practices that

affect access to health care, health coverage, health care

delivery and health outcomes, including the federal Indian

Health Care Improvement Act, the federal Employee Retirement

Income Security Act of 1974, the federal tax code, the federal

Social Security Act and the federal Health Insurance

Portability and Accountability Act of 1996;

(13) the costs and implications of moving to a

community rating system for all health insurance products;

(14) methods of establishing adequate rate

ranges paid to providers and the impact of current rates on

health service delivery, health care access, health

professional supply and health outcomes;

(15) the impact on health care cost and health

care access due to:

(a) providers' choices about acceptance

or refusal of payment from state, federal or joint

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state-federal programs and commercial insurance; and

(b) public and private provider

credentialing processes, including provisional credentialing;

(16) disparities in disease rates and in

access to health coverage and health care by gender, ethnicity,

race, age, population health, language and cultural and other

factors; and

(17) such other analyses as directed by the

legislature or recommended by the administration's advisory

councils and determined appropriate by the board;

E. annually, or as often as resources allow,

conduct:

(1) studies and analyses of health care and

health coverage functions and trends, including information on

the cost and type of health coverage available and obtained in

the state;

(2) household and employer surveys to

ascertain the extent of health coverage offered and take-up

rates; and

(3) studies and analyses of existing or

proposed insurance benefit mandates imposed by law or rule;

F. provide materials, training, outreach

activities, public service announcements and other media

approaches to educate the general public about:

(1) the benefits of wellness, prevention and

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disease management activities;

(2) the benefits of health coverage for

individuals, families and employers; and

(3) health coverage requirements and options

for individuals, families, employers and other groups;

G. to the extent not otherwise required or

available by law or rule, define, collect, monitor and report

data about health care costs at the health insurer and provider

levels, quality, including adverse incidents and hospital

infection rates, and access across all sectors of the health

care field, ensuring that individual patient information and

corporate proprietary information are protected and remain

confidential;

H. to the extent not otherwise required or

available by law or rule, provide an alternative dispute

resolution process for provider complaint resolution without

intrusion into the contractual relationship between a payer and

a provider;

I. enter into joint powers agreements or other

agreements with tribes, which may include data-sharing

agreements, to improve health care or encourage health coverage

of tribal members; and

J. report quarterly to the governor, the

legislature and the public on performance measures set by the

administration.

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Section 7. [NEW MATERIAL] IMPACT OF REFORM INITIATIVES--

REPORT BY THE HEALTH CARE BENEFITS ADMINISTRATION.--

A. The administration shall arrange for an external

evaluation of the initiatives required by the Health Care

Benefits Act no sooner than January 1, 2012 nor later than

January 1, 2014. The evaluation shall be conducted in

collaboration with the human services department, the

department of health and the insurance division of the public

regulation commission. The findings and recommendations of the

evaluation shall be reported to the legislative finance

committee, the interim legislative health and human services

committee and the governor. The evaluation shall include a

review of:

(1) the functioning and capacity of the

administration;

(2) the progress toward or the barriers

against the achievement of identified goals designed to

increase health coverage;

(3) medical and nonmedical costs of health

care and health coverage offered by commercial carriers and

public programs;

(4) the progress made toward electronic claims

submission, electronic payment transactions and electronic

medical records;

(5) available access to quality health care

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throughout the state with an emphasis on underserved areas and

populations; and

(6) quantifiable progress toward enhancing the

health outcomes of people living in the state.

B. The administration shall, in consultation with

the insurance division of the public regulation commission,

review reform provisions pursuant to the New Mexico Insurance

Code to determine their costs and impact on employers, groups,

employees and individuals and provide a report on

recommendations regarding the reforms, including whether to

retain, revise or repeal them.

Section 8. [NEW MATERIAL] REPORTING AND USE OF DATA.--

A. Health insurers and providers, except individual

practitioners, shall report to the administration the

appropriate data about health coverage, health care and health

coverage costs, health services delivered, incidents and

infection rates and health outcomes achieved in a format

required or approved by the administration after consultation

with other state entities authorized to collect related data.

B. Data reported shall be in aggregate form except

where patient-specific information is necessary to provide

unduplicated information. Data shall be reported

electronically to the extent possible. The administration

shall use and report data received only in aggregate form and

shall not use or release any individual-identifying information

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or corporate proprietary information for any purpose except as

provided by state or federal law or by court order.

C. In developing such data reporting requirements,

the administration shall seek and consider input from health

insurers, providers, advisory councils created pursuant to

Section 3 of the Health Care Benefits Act and the public

regarding the format, timing and method of transmission of data

to prevent duplicative reporting and to make reporting of data

the least burdensome possible while achieving the purposes of

that act.

D. The administration may use data collected by

provider associations or other entities and shall not request

data already collected by and available from other state

agencies.

Section 9. [NEW MATERIAL] HEALTHY NEW MEXICO FUND--

CREATED.--

A. The "healthy New Mexico fund" is created in the

state treasury. The fund and any income produced by the fund

shall be deposited in a segregated account and invested by the

state investment council in consultation with the

administration. Money in the fund shall be used solely for the

purposes of the fund and shall not be used to pay any general

or special obligation or debt of the state, other than as

authorized by this section.

B. The fund shall consist of money appropriated to

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the fund, income from investment of the fund, employees'

contributions, insurance or reinsurance proceeds and other

funds received by gift, grant, bequest or otherwise for deposit

in the fund, including refunds or payments from health insurers

designated to be deposited in this fund, all of which are

appropriated to and for the purposes of the fund.

C. Disbursements from the fund for purposes other

than procuring and paying for insurance or insurance-related

services, including third-party administration, premiums,

claims and cost-containment activities, shall be made only upon

warrant drawn by the secretary of finance and administration

pursuant to vouchers signed by the executive director or the

executive director's designee; provided that the chair of the

board may sign vouchers if the position of director is vacant.

D. Subject to appropriation by the legislature,

money in the fund shall be used to fund outreach and pay for

health care premiums or services through publicly authorized

programs to expand coverage or as otherwise provided by law.

Any unexpended or unencumbered balance remaining in the fund at

the end of any fiscal year shall not revert.

Section 10. Section 10-7B-2 NMSA 1978 (being Laws 1989,

Chapter 231, Section 2, as amended) is amended to read:

"10-7B-2. DEFINITIONS.--As used in the Group Benefits

Act:

A. "committee" means the [group benefits committee]

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board of directors of the health care benefits administration;

B. "director" means the executive director of the

[risk management division of the general services department]

health care benefits administration;

C. "employee" means a salaried officer, employee or

legislator of the state; a salaried officer or an employee of a

local public body; or an elected or appointed supervisor of a

soil and water conservation district;

D. "local public body" means any New Mexico

incorporated municipality, county or school district;

E. "professional claims administrator" means any

person or legal entity that has at least five years of

experience handling group benefits claims, as well as such

other qualifications as the director may determine from time to

time with the committee's advice;

F. "small employer" means a person having

for-profit or nonprofit status that employs an average of fifty

or fewer persons over a twelve-month period; and

G. "state" or "state agency" means the state of New

Mexico or any of its branches, agencies, departments, boards,

instrumentalities or institutions."

Section 11. Section 10-7C-4 NMSA 1978 (being Laws 1990,

Chapter 6, Section 4, as amended) is amended to read:

"10-7C-4. DEFINITIONS.--As used in the Retiree Health

Care Act:

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A. "active employee" means an employee of a public

institution or any other public employer participating in

either the Educational Retirement Act, the Public Employees

Retirement Act, the Judicial Retirement Act, the Magistrate

Retirement Act or the Public Employees Retirement Reciprocity

Act or an employee of an independent public employer;

B. "authority" means the [retiree] health care

[authority created pursuant to the Retiree Health Care Act]

benefits administration;

C. "basic plan of benefits" means only those

coverages generally associated with a medical plan of benefits;

D. "board" means the board of directors of the

[retiree] health care [authority] benefits administration;

E. "current retiree" means an eligible retiree who

is receiving a disability or normal retirement benefit under

the Educational Retirement Act, the Public Employees Retirement

Act, the Judicial Retirement Act, the Magistrate Retirement

Act, the Public Employees Retirement Reciprocity Act or the

retirement program of an independent public employer on or

before July 1, 1990;

F. "eligible dependent" means a person obtaining

retiree health care coverage based upon that person's

relationship to an eligible retiree as follows:

(1) a spouse;

(2) an unmarried child under the age of

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nineteen who is:

(a) a natural child;

(b) a legally adopted child;

household who is primarily dependent on the eligible retiree

for maintenance and support;

(d) a child for whom the eligible

retiree is the legal guardian and who is primarily dependent on

the eligible retiree for maintenance and support, as long as

evidence of the guardianship is evidenced in a court order or

decree; or

(e) a foster child living in the same

household;

(3) a child described in Subparagraphs (a)

through (e) of Paragraph (2) of this subsection who is between

the ages of nineteen and twenty-five and is a full-time student

at an accredited educational institution; provided that

"full-time student" shall be a student enrolled in and taking

twelve or more semester hours or its equivalent contact hours

in primary, secondary, undergraduate or vocational school or a

student enrolled in and taking nine or more semester hours or

its equivalent contact hours in graduate school;

(4) a dependent child over nineteen who is

wholly dependent on the eligible retiree for maintenance and

support and who is incapable of self-sustaining employment by

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reason of mental retardation or physical handicap; provided

that proof of incapacity and dependency shall be provided

within thirty-one days after the child reaches the limiting age

and at such times thereafter as may be required by the board;

(5) a surviving spouse defined as follows:

(a) "surviving spouse" means the spouse

to whom a retiree was married at the time of death; or

(b) "surviving spouse" means the spouse

to whom a deceased vested active employee was married at the

time of death; or

(6) a surviving dependent child who is the

dependent child of a deceased eligible retiree whose other

parent is also deceased;

G. "eligible employer" means either:

(1) a "retirement system employer", which

means an institution of higher education, a school district or

other entity participating in the public school insurance

authority, a state agency, state court, magistrate court,

municipality, county or public entity, each of which is

affiliated under or covered by the Educational Retirement Act,

the Public Employees Retirement Act, the Judicial Retirement

Act, the Magistrate Retirement Act or the Public Employees

Retirement Reciprocity Act; or

(2) an "independent public employer", which

means a municipality, county or public entity that is not a

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retirement system employer;

H. "eligible retiree" means:

(1) a "nonsalaried eligible participating

entity governing authority member", which means a person who is

not a retiree and who:

(a) has served without salary as a

member of the governing authority of an employer eligible to

participate in the benefits of the Retiree Health Care Act and

is certified to be such by the executive director of the public

school insurance authority;

(b) has maintained group health

insurance coverage through that member's governing authority if

such group health insurance coverage was available and offered

to the member during the member's service as a member of the

governing authority; and

health insurance program under the Retiree Health Care Act

prior to July 1, 1993; or

(d) notwithstanding the provisions of

Subparagraphs (b) and (c) of this paragraph, is eligible under

Subparagraph (a) of this paragraph and has applied before

August 1, 1993 to the authority to participate in the program;

(2) a "salaried eligible participating entity

governing authority member", which means a person who is not a

retiree and who:

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(a) has served with salary as a member

of the governing authority of an employer eligible to

participate in the benefits of the Retiree Health Care Act;

(b) has maintained group health

insurance through that member's governing authority, if such

group health insurance was available and offered to the member

during the member's service as a member of the governing

authority; and

health insurance program under the Retiree Health Care Act

prior to July 1, 1993; or

(d) notwithstanding the provisions of

Subparagraphs (b) and (c) of this paragraph, is eligible under

Subparagraph (a) of this paragraph and has applied before

August 1, 1993 to the authority to participate in the program;

(3) an "eligible participating retiree", which

means a person who:

(a) falls within the definition of a

retiree, has made contributions to the fund for at least five

years prior to retirement and whose eligible employer during

that period of time made contributions as a participant in the

Retiree Health Care Act on the person's behalf, unless that

person retires on or before July 1, 1995, in which event the

time period required for employee and employer contributions

shall become the period of time between July 1, 1990 and the

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date of retirement, and who is certified to be a retiree by the

educational retirement director, the executive secretary of the

public employees retirement board or the governing authority of

an independent public employer;

(b) falls within the definition of a

retiree, retired prior to July 1, 1990 and is certified to be a

retiree by the educational retirement director, the executive

secretary of the public employees retirement association or the

governing authority of an independent public employer; but this

paragraph does not include a retiree who was an employee of an

eligible employer who exercised the option not to be a

participating employer pursuant to the Retiree Health Care Act

and did not after January 1, 1993 elect to become a

participating employer; unless the retiree: 1) retired on or

before June 30, 1990; and 2) at the time of retirement did not

have a retirement health plan or retirement health insurance

coverage available from [his] the retiree's employer; or

time of retirement an employee of an eligible employer who

exercised the option not to be a participating employer

pursuant to the Retiree Health Care Act, but which eligible

employer subsequently elected after January 1, 1993 to become a

participating employer; 2) has made contributions to the fund

for at least five years prior to retirement and whose eligible

employer during that period of time made contributions as a

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participant in the Retiree Health Care Act on the person's

behalf, unless that person retires less than five years after

the date participation begins, in which event the time period

required for employee and employer contributions shall become

the period of time between the date participation begins and

the date of retirement; and 3) is certified to be a retiree by

the educational retirement director, the executive director of

the public employees retirement board or the governing

authority of an independent public employer;

(4) a "legislative member", which means a

person who is not a retiree and who served as a member of the

New Mexico legislature for at least two years, but is no longer

a member of the legislature and is certified to be such by the

legislative council service; or

(5) a "former participating employer governing

authority member", which means a person, other than a

nonsalaried eligible participating entity governing authority

member or a salaried eligible participating entity governing

authority member, who is not a retiree and who served as a

member of the governing authority of a participating employer

for at least four years but is no longer a member of the

governing authority and whose length of service is certified by

the chief executive officer of the participating employer;

I. "fund" means the retiree health care fund;

J. "group health insurance" means coverage that

pg_0028

.173788.2GR

- 28 -

includes but is not limited to life insurance, accidental death

and dismemberment, hospital care and benefits, surgical care

and treatment, medical care and treatment, dental care, eye

care, obstetrical benefits, prescribed drugs, medicines and

prosthetic devices, medicare supplement, medicare carveout,

medicare coordination and other benefits, supplies and services

through the vehicles of indemnity coverages, health maintenance

organizations, preferred provider organizations and other

health care delivery systems as provided by the Retiree Health

Care Act and other coverages considered by the board to be

advisable;

K. "ineligible dependents" include:

(1) those dependents created by common law

relationships;

(2) dependents while in active military

service;

(3) parents, aunts, uncles, brothers, sisters,

grandchildren and other family members left in the care of an

eligible retiree without evidence of legal guardianship; and

(4) anyone not specifically referred to as an

eligible dependent pursuant to the rules and regulations

adopted by the board;

L. "participating employee" means an employee of

a participating employer, which employee has not been expelled

from participation in the Retiree Health Care Act pursuant to

pg_0029

.173788.2GR

- 29 -

Section 10-7C-10 NMSA 1978;

M. "participating employer" means an eligible

employer who has satisfied the conditions for participating in

the benefits of the Retiree Health Care Act, including the

requirements of Subsection M of Section 10-7C-7 NMSA 1978 and

Subsection D or E of Section 10-7C-9 NMSA 1978, as applicable;

N. "public entity" means a flood control authority,

economic development district, council of governments, regional

housing authority, conservancy district or other special

district or special purpose government; and

O. "retiree" means a person who:

(1) is receiving:

(a) a disability or normal retirement

benefit or survivor's benefit pursuant to the Educational

Retirement Act;

(b) a disability or normal retirement

benefit or survivor's benefit pursuant to the Public Employees

Retirement Act, the Judicial Retirement Act, the Magistrate

Retirement Act or the Public Employees Retirement Reciprocity

Act; or

benefit or survivor's benefit pursuant to the retirement

program of an independent public employer to which that

employer has made periodic contributions; or

(2) is not receiving a survivor's benefit but

pg_0030

.173788.2GR

- 30 -

is the eligible dependent of a person who received a disability

or normal retirement benefit pursuant to the Educational

Retirement Act, the Public Employees Retirement Act, the

Judicial Retirement Act, the Magistrate Retirement Act or the

Public Employees Retirement Reciprocity Act."

Section 12. Section 22-29-3 NMSA 1978 (being Laws 1986,

Chapter 94, Section 3, as amended by Laws 2007, Chapter 41,

Section 1 and by Laws 2007, Chapter 236, Section 1) is amended

to read:

"22-29-3. DEFINITIONS.--As used in the Public School

Insurance Authority Act:

A. "authority" means the public school insurance

authority for purposes of risk-related coverage and the health

care benefits administration for purposes of group health

insurance;

B. "board" means the board of directors of the

public school insurance authority for purposes of risk-related

coverage and the board of directors of the health care benefits

administration for purposes of group health insurance;

C. "charter school" means a school organized as a

charter school pursuant to the provisions of the Charter

Schools Act;

D. "director" means the director of the public

school insurance authority for purposes of risk-related

coverage and the executive director of the health care benefits

pg_0031

.173788.2GR

- 31 -

administration for purposes of group health insurance;

E. "due process reimbursement" means the

reimbursement of a school district's or charter school's

expenses for attorney fees, hearing officer fees and other

reasonable expenses incurred as a result of a due process

hearing conducted pursuant to the federal Individuals with

Disabilities Education Improvement Act;

F. "educational entities" means state educational

institutions as enumerated in Article 12, Section 11 of the

constitution of New Mexico and other state diploma,

degree-granting and certificate-granting post-secondary

educational institutions, regional education cooperatives and

nonprofit organizations dedicated to the improvement of public

education and whose membership is composed exclusively of

public school employees, public schools or school districts;

G. "fund" means the public school insurance fund;

H. "group health insurance" means coverage that

includes life insurance, accidental death and dismemberment,

medical care and treatment, dental care, eye care and other

coverages as determined by the authority;

I. "risk-related coverage" means coverage that

includes property and casualty, general liability, auto and

fleet, workers' compensation and other casualty insurance; and

J. "school district" means a school district as

defined in Subsection [R] S of Section 22-1-2 NMSA 1978,

pg_0032

.173788.2GR

- 32 -

excluding any school district with a student enrollment in

excess of sixty thousand students."

Section 13. Section 22-29-6 NMSA 1978 (being Laws 1986,

Chapter 94, Section 6, as amended) is amended to read:

"22-29-6. FUND CREATED--BUDGET REVIEW--PREMIUMS.--

A. There is created the "public school insurance

fund". All income earned on the fund shall be credited to the

fund. The fund is appropriated to the authority to carry out

the provisions of the Public School Insurance Authority Act.

Any money remaining in the fund at the end of each fiscal year

shall not revert to the general fund.

B. The board shall determine which money in the

fund constitutes the long-term reserves of the authority. The

state investment officer shall invest the long-term reserves of

the authority in accordance with the provisions of Sections

6-8-1 through 6-8-16 NMSA 1978. The state treasurer shall

invest the money in the fund that does not constitute the long-

term reserves of the fund in accordance with the applicable

provisions of Chapter 6, Article 10 NMSA 1978.

C. All appropriations shall be subject to budget

review through the department [of education], the state budget

division of the department of finance and administration and

the legislative finance committee.

D. The authority shall provide that premiums are

collected from school districts and charter schools

pg_0033

.173788.2GR

- 33 -

participating in the authority sufficient to provide the

required insurance coverage and to pay the expenses of the

authority. All premiums shall be credited to the fund.

E. Any reserves remaining at the termination of an

insurance contract shall be disbursed to the individual school

districts, charter schools and other participating entities on

a pro rata basis.

F. Disbursements from the fund for purposes other

than procuring and paying for insurance or insurance-related

services, including [but not limited to] third-party

administration, premiums, claims and cost containment

activities, shall be made only upon warrant drawn by the

secretary of finance and administration pursuant to vouchers

signed by the director or [his] the director's designee;

provided that the [chairman] chair of the board may sign

vouchers if the position of director is vacant.

G. On and after July 1, 2009, the fund shall

consist of two accounts: the "risk account" and the "group

health insurance account". All premiums related to risk

insurance shall be deposited into the risk account, and all

expenditures related to risk insurance shall be made from the

risk account. All premiums related to group health insurance

shall be deposited into the group health insurance account, and

all expenditures related to group health insurance shall be

made from the group health insurance account. On July 1, 2009,

pg_0034

.173788.2GR

- 34 -

the secretary of finance and administration, with the advice of

the public school insurance authority and the health care

benefits administration, shall determine the initial balance of

each account."

Section 14. Section 59A-6-5 NMSA 1978 (being Laws 1984,

Chapter 127, Section 105, as amended) is amended to read:

"59A-6-5. DISTRIBUTION OF DIVISION COLLECTIONS.--

A. All money received by the division for fees,

licenses, penalties and taxes shall be paid daily by the

superintendent to the state treasurer and credited to the

"insurance department suspense fund" except as provided by:

(1) the Law Enforcement Protection Fund Act;

(2) Section 59A-6-1.1 NMSA 1978; and

(3) the Voter Action Act.

B. The superintendent may authorize refund of money

erroneously paid as fees, licenses, penalties or taxes from the

insurance department suspense fund under request for refund

made within three years after the erroneous payment. In the

case of premium taxes erroneously paid or overpaid in

accordance with law, refund may also be requested as a credit

against premium taxes due in any annual or quarterly premium

tax return filed within three years of the erroneous or excess

payment.

C. The "insurance operations fund" is created in

the state treasury. The fund shall consist of the

pg_0035

.173788.2GR

- 35 -

distributions made to it pursuant to Subsection D of this

section. The legislature shall annually appropriate from the

fund to the division those amounts necessary for the division

to carry out its responsibilities pursuant to the Insurance

Code and other laws. Any balance in the fund at the end of a

fiscal year greater than one-half of that fiscal year's

appropriation shall revert to the general fund.

D. At the end of every month, after applicable

refunds are made pursuant to Subsection B of this section, the

treasurer shall make the following transfers from the balance

remaining in the insurance department suspense fund:

(1) to the "fire protection fund", that part

of the balance derived from property and vehicle insurance

business;

(2) to the insurance operations fund, that

part of the balance derived from the fees imposed pursuant to

Subsections A and E of Section 59A-6-1 NMSA 1978 other than

fees derived from property and vehicle insurance business;

[and]

(3) to the healthy New Mexico fund, that part

of the balance derived pursuant to Section 59A-6-2 NMSA 1978

that exceeds one-fourth of the amount collected pursuant to

Section 59A-6-2 NMSA 1978 for calendar year 2009; and

[(3)] (4) to the general fund, the balance

remaining in the insurance department suspense fund derived

pg_0036

.173788.2GR

- 36 -

from all other kinds of insurance business."

Section 15. Section 59A-56-3 NMSA 1978 (being Laws 1994,

Chapter 75, Section 3, as amended) is amended to read:

"59A-56-3. DEFINITIONS.--As used in the Health Insurance

Alliance Act:

A. "alliance" means the New Mexico health insurance

alliance;

B. "approved health plan" means any arrangement for

the provisions of health insurance offered through and approved

by the alliance;

C. "board" means the board of directors of the

[alliance] health care benefits administration;

D. "child" means a dependent unmarried individual

who is less than twenty-five years of age;

E. "creditable coverage" means, with respect to an

individual, coverage of the individual pursuant to:

(1) a group health plan;

(2) health insurance coverage;

(3) Part A or Part B of Title 18 of the

federal Social Security Act;

(4) Title 19 of the federal Social Security

Act except coverage consisting solely of benefits pursuant to

Section 1928 of that title;

(5) 10 USCA Chapter 55;

[(6) a medical care program of the Indian

pg_0037

.173788.2GR

- 37 -

health service or of an Indian nation, tribe or pueblo;

(7)] (6) the Medical Insurance Pool Act;

[(8)] (7) a health plan offered pursuant to

5 USCA Chapter 89;

[(9)] (8) a public health plan as defined in

federal regulations; or

[(10)] (9) a health benefit plan offered

pursuant to Section 5(e) of the federal Peace Corps Act;

F. "department" means the insurance division of the

commission;

G. "director" means an individual who serves on the

board;

H. "earned premiums" means premiums paid or due

during a calendar year for coverage under an approved health

plan less any unearned premiums at the end of that calendar

year plus any unearned premiums from the end of the immediately

preceding calendar year;

I. "eligible expenses" means the allowable charges

for a health care service covered under an approved health

plan;

J. "eligible individual":

(1) means an individual who:

(a) as of the date of the individual's

application for coverage under an approved health plan, has an

aggregate of eighteen or more months of creditable coverage,

pg_0038

.173788.2GR

- 38 -

the most recent of which was under a group health plan,

governmental plan or church plan as those plans are defined in

Subsections P, N and D of Section 59A-23E-2 NMSA 1978,

respectively, or health insurance offered in connection with

any of those plans, but for the purposes of aggregating

creditable coverage, a period of creditable coverage shall not

be counted with respect to enrollment of an individual for

coverage under an approved health plan if, after that period

and before the enrollment date, there was a [sixty-three day]

ninety-five-day or longer period during all of which the

individual was not covered under any creditable coverage; or

(b) is entitled to continuation coverage

pursuant to Section 59A-56-20 or 59A-23E-19 NMSA 1978; and

(2) does not include an individual who:

(a) has or is eligible for coverage

under a group health plan;

(b) is eligible for coverage under

medicare or a state plan under Title 19 of the federal Social

Security Act or any successor program;

defined in Subsection R of Section 59A-23E-2 NMSA 1978;

(d) during the most recent coverage

within the coverage period described in Subparagraph (a) of

Paragraph (1) of this subsection was terminated from coverage

as a result of nonpayment of premium or fraud; or

pg_0039

.173788.2GR

- 39 -

(e) has been offered the option of

coverage under a COBRA continuation provision as that term is

defined in Subsection F of Section 59A-23E-2 NMSA 1978, or

under a similar state program, except for continuation coverage

under Section 59A-56-20 NMSA 1978, and did not exhaust the

coverage available under the offered program;

K. "enrollment date" means, with respect to an

individual covered under a group health plan or health

insurance coverage, the date of enrollment of the individual in

the plan or coverage or, if earlier, the first day of the

waiting period for that enrollment;

L. "gross earned premiums" means premiums paid or

due during a calendar year for all health insurance written in

the state less any unearned premiums at the end of that

calendar year plus any unearned premiums from the end of the

immediately preceding calendar year;

M. "group health plan" means an employee welfare

benefit plan to the extent the plan provides hospital, surgical

or medical expenses benefits to employees or their dependents,

as defined by the terms of the plan, directly through

insurance, reimbursement or otherwise;

N. "health care service" means a service or product

furnished an individual for the purpose of preventing,

alleviating, curing or healing human illness or injury and

includes services and products incidental to furnishing the

pg_0040

.173788.2GR

- 40 -

described services or products;

O. "health insurance" means "health" insurance as

defined in Section 59A-7-3 NMSA 1978; any hospital and medical

expense-incurred policy; nonprofit health care plan service

contract; health maintenance organization subscriber contract;

short-term, accident, fixed indemnity, specified disease policy

or disability income insurance contracts and limited health

benefit or credit health insurance; coverage for health care

services under uninsured arrangements of group or group-type

contracts, including employer self-insured, cost-plus or other

benefits methodologies not involving insurance or not subject

to New Mexico premium taxes; coverage for health care services

under group-type contracts that are not available to the

general public and can be obtained only because of connection

with a particular organization or group; coverage by medicare

or other governmental programs providing health care services;

but "health insurance" does not include insurance issued

pursuant to provisions of the Workers' Compensation Act or

similar law, automobile medical payment insurance or provisions

by which benefits are payable with or without regard to fault

and are required by law to be contained in any liability

insurance policy;

P. "health maintenance organization" means a health

maintenance organization as defined by Subsection M of Section

59A-46-2 NMSA 1978;

pg_0041

.173788.2GR

- 41 -

Q. "incurred claims" means claims paid during a

calendar year plus claims incurred in the calendar year and

paid prior to April 1 of the succeeding year, less claims

incurred previous to the current calendar year and paid prior

to April 1 of the current year;

R. "insured" means a small employer or its employee

and an individual covered by an approved health plan, a former

employee of a small employer who is covered by an approved

health plan through conversion or an individual covered by an

approved health plan that allows individual enrollment;

S. "medicare" means coverage under both Parts A and

B of Title 18 of the federal Social Security Act;

T. "member" means a member of the alliance;

U. "nonprofit health care plan" means a health care

plan as defined in Subsection K of Section 59A-47-3 NMSA 1978;

V. "premiums" means the premiums received for

coverage under an approved health plan during a calendar year;

W. "small employer" means a person that is a

resident of this state, has employees at least fifty percent of

whom are residents of this state, is actively engaged in

business and that on at least fifty percent of its working days

during either of the two preceding calendar years, employed no

fewer than two and no more than fifty eligible employees;

provided that:

(1) in determining the number of eligible

pg_0042

.173788.2GR

- 42 -

employees, the spouse or dependent of an employee may, at the

employer's discretion, be counted as a separate employee;

(2) companies that are affiliated companies or

that are eligible to file a combined tax return for purposes of

state income taxation shall be considered one employer; and

(3) in the case of an employer that was not in

existence throughout a preceding calendar year, the

determination of whether the employer is a small or large

employer shall be based on the average number of employees that

it is reasonably expected to employ on working days in the

current calendar year;

X. "superintendent" means the superintendent of

insurance;

Y. "total premiums" means the total premiums for

business written in the state received during a calendar year;

and

Z. "unearned premiums" means the portion of a

premium previously paid for which the coverage period is in the

future."

Section 16. Section 59A-56-4 NMSA 1978 (being Laws 1994,

Chapter 75, Section 4, as amended) is amended to read:

"59A-56-4. ALLIANCE CREATED [BOARD CREATED].--

A. The "New Mexico health insurance alliance" is

created [as a nonprofit public corporation] for the purpose of

providing increased access to health insurance in the state.

pg_0043

.173788.2GR

- 43 -

All insurance companies authorized to transact health insurance

business in this state, nonprofit health care plans, health

maintenance organizations and self-insurers not subject to

federal preemption shall organize and be members of the

alliance as a condition of their authority to offer health

insurance in this state, except for an insurance company that

is licensed under the Prepaid Dental Plan Law or a company that

is solely engaged in the sale of dental insurance and is

licensed under a provision of the Insurance Code.

[B. The alliance shall be governed by a board of

directors constituted pursuant to the provisions of this

section. The board is a governmental entity for purposes of

the Tort Claims Act, but neither the board nor the alliance

shall be considered a governmental entity for any other

purpose.

C. Each member shall be entitled to one vote in

person or by proxy at each meeting.

D.] B. The alliance shall operate subject to the

supervision and approval of the board. [The board shall

consist of:

(1) five directors, elected by the members,

who shall be officers or employees of members and shall consist

of two representatives of health maintenance organizations and

three representatives of other types of members;

(2) five directors, appointed by the governor,

pg_0044

.173788.2GR

- 44 -

who shall be officers, general partners or proprietors of small

employers, one director of which shall represent nonprofit

corporations;

(3) four directors, appointed by the governor,

who shall be employees of small employers; and

(4) the superintendent or the superintendent's

designee, who shall be a nonvoting member, except when the

superintendent's vote is necessary to break a tie.

E. The superintendent shall serve as chairman of

the board unless the superintendent declines, in which event

the superintendent shall appoint the chairman.

F. The directors elected by the members shall be

elected for initial terms of three years or less, staggered so

that the term of at least one director expires on June 30 of

each year. The directors appointed by the governor shall be

appointed for initial terms of three years or less, staggered

so that the term of at least one director expires on June 30 of

each year. Following the initial terms, directors shall be

elected or appointed for terms of three years. A director

whose term has expired shall continue to serve until a

successor is elected or appointed and qualified.

G. Whenever a vacancy on the board occurs, the

electing or appointing authority of the position that is vacant

shall fill the vacancy by electing or appointing an individual

to serve the balance of the unexpired term; provided, when a

pg_0045

.173788.2GR

- 45 -

vacancy occurs in one of the director's positions elected by

the members, the superintendent is authorized to appoint a

temporary replacement director until the next scheduled

election of directors elected by the members is held. The

individual elected or appointed to fill a vacancy shall meet

the requirements for initial election or appointment to that

position.

H. Directors may be reimbursed by the alliance as

provided in the Per Diem and Mileage Act for nonsalaried public

officers, but shall receive no other compensation, perquisite

or allowance from the alliance.]"

Section 17. Section 59A-56-14 NMSA 1978 (being Laws 1994,

Chapter 75, Section 14, as amended) is amended to read:

"59A-56-14. ELIGIBILITY--GUARANTEED ISSUE--PLAN

PROVISIONS.--

A. A small employer is eligible for an approved

health plan if on the effective date of coverage or renewal:

(1) at least fifty percent of its employees

not otherwise insured elect to be covered under the approved

health plan;

(2) the small employer has not terminated

coverage with an approved health plan within three years of the

date of application for coverage except to change to another

approved health plan; and

(3) the small employer does not offer other

pg_0046

.173788.2GR

- 46 -

general group health insurance coverage to its employees. For

the purposes of this paragraph, general group health insurance

coverage excludes coverage that:

(a) is offered by a state or federal

agency to a small employer's employee whose eligibility for

alternative coverage is based on the employee's income; or

(b) provides only a specific limited

form of health insurance such as accident or disability income

insurance coverage or a specific health care service such as

dental care.

B. An individual is eligible for an approved health

plan if on the effective date of coverage or renewal the

individual meets the definition of an eligible individual under

Section 59A-56-3 NMSA 1978.

C. An approved health plan shall provide in

substance that attainment of the limiting age by an unmarried

dependent individual does not operate to terminate coverage

when the individual continues to be incapable of self-

sustaining employment by reason of developmental disability or

physical handicap and the individual is primarily dependent for

support and maintenance upon the employee. Proof of incapacity

and dependency shall be furnished to the alliance and the

member that offered the approved health plan within one hundred

twenty days of attainment of the limiting age. The board may

require subsequent proof annually after a two-year period

pg_0047

.173788.2GR

- 47 -

following attainment of the limiting age.

D. An approved health plan shall provide that the

health insurance benefits applicable for eligible dependents

are payable with respect to a newly born child of the family

member or the individual in whose name the contract is issued

from the moment of birth, including the necessary care and

treatment of medically diagnosed congenital defects and birth

abnormalities. If payment of a specific premium is required to

provide coverage for the child, the contract may require that

notification of the birth of a child and payment of the

required premium shall be furnished to the member within

thirty-one days after the date of birth in order to have the

coverage from birth. An approved health plan shall provide

that the health insurance benefits applicable for eligible

dependents are payable for an adopted child in accordance with

the provisions of Section 59A-22-34.1 NMSA 1978.

E. Except as provided in Subsections G, H and I of

this section, an approved health plan offered to a small

employer may contain a preexisting condition exclusion only if:

(1) the exclusion relates to a condition,

physical or mental, regardless of the cause of the condition,

for which medical advice, diagnosis, care or treatment was

recommended or received within the six-month period ending on

the enrollment date;

(2) the exclusion extends for a period of not

pg_0048

.173788.2GR

- 48 -

more than six months after the enrollment date; and

(3) the period of the exclusion is reduced by

the aggregate of the periods of creditable coverage applicable

to the participant or beneficiary as of the enrollment date.

F. As used in this section, "preexisting condition

exclusion" means a limitation or exclusion of benefits relating

to a condition based on the fact that the condition was present

before the date of enrollment for coverage for the benefits

whether or not any medical advice, diagnosis, care or treatment

was recommended or received before that date, but genetic

information is not included as a preexisting condition for the

purposes of limiting or excluding benefits in the absence of a

diagnosis of the condition related to the genetic information.

G. An insurer shall not impose a preexisting

condition exclusion:

(1) in the case of an individual who, as of

the last day of the thirty-day period beginning with the date

of birth, is covered under creditable coverage;

(2) that excludes a child who is adopted or

placed for adoption before the child's eighteenth birthday and

who, as of the last day of the thirty-day period beginning on

and following the date of the adoption or placement for

adoption, is covered under creditable coverage; or

(3) that relates to or includes pregnancy as a

preexisting condition.

pg_0049

.173788.2GR

- 49 -

H. The provisions of Paragraphs (1) and (2) of

Subsection G of this section do not apply to any individual

after the end of the first continuous [sixty-three-day] ninety-

five-day period during which the individual was not covered

under any creditable coverage.

I. The preexisting condition exclusions described

in Subsection E of this section shall be waived to the extent

to which similar exclusions have been satisfied under any prior

health insurance coverage if the effective date of coverage for

health insurance through the alliance is made not later than

[sixty-three] ninety-five days following the termination of the

prior coverage. In that case, coverage through the alliance

shall be effective from the date on which the prior coverage

was terminated. This subsection does not prohibit preexisting

conditions coverage in an approved health plan that is more

favorable to the covered individual than that specified in this

subsection.

J. An approved health plan issued to an eligible

individual shall not contain any preexisting condition

exclusion.

K. An individual is not eligible for coverage by

the alliance under an approved health plan issued to a small

employer if the individual:

(1) is eligible for medicare; provided,

however, that if an individual has health insurance coverage

pg_0050

.173788.2GR

- 50 -

from an employer whose group includes twenty or more

individuals, an individual eligible for medicare who continues

to be employed may choose to be covered through an approved

health plan;

(2) has voluntarily terminated health

insurance issued through the alliance within the past twelve

months unless it was due to a change in employment; or

(3) is an inmate of a public institution.

L. The alliance shall provide for an open

enrollment period of sixty days from the initial offering of an

approved health plan. Individuals enrolled during the open

enrollment period shall not be subject to the preexisting

conditions limitation.

M. If an insured covered by an approved health plan

switches to another approved health plan that provides

increased or additional benefits such as lower deductible or

co-payment requirements, the member offering the approved

health plan with increased or additional benefits may require

the six-month period for preexisting conditions provided in

Subsection E of this section to be satisfied prior to receipt

of the additional benefits."

Section 18. TEMPORARY PROVISION--NEW MEXICO HEALTH POLICY

COMMISSION--TRANSFER OF PERSONNEL, PROPERTY, CONTRACTS AND

REFERENCES IN LAW.--On January 1, 2009, as determined by the

secretary of finance and administration upon advice of the

pg_0051

.173788.2GR

- 51 -

executive director of the New Mexico health policy commission:

A. all personnel, appropriations, money, records,

equipment, supplies and other property of the New Mexico health

policy commission shall be transferred to the health care

benefits administration;

B. all contracts of the New Mexico health policy

commission shall be binding and effective on the health care

benefits administration; and

C. all references in law to the New Mexico health

policy commission shall be deemed to be references to the

health care benefits administration.

Section 19. TEMPORARY PROVISION--TRANSITION OF HEALTH

COVERAGE PROGRAMS TO THE HEALTH CARE BENEFITS ADMINISTRATION.--

The health care benefits administration shall:

A. by July 1, 2009, combine under the auspices of

the health care benefits administration the administrative

management of the public school insurance authority as it

relates to group health insurance but not including risk-

related coverages as those are defined in the Public School

Insurance Authority Act, the health coverage programs pursuant

to the Group Benefits Act and the publicly funded health care

program of any public school district with a student enrollment

in excess of sixty thousand students; provided, however, that

the purposes and financing mechanisms of the respective

programs are maintained, identifiable and accounted for

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separately to ensure that respective beneficiaries obtain the

services to which they are entitled; and

B. by July 1, 2010, combine under the auspices of

the health care benefits administration the management of the

New Mexico health insurance alliance, the retiree health care

authority and state-sponsored premium assistance programs

pursuant to Subsection B of Section 27-2-12 NMSA 1978 and the

New Mexico state coverage insurance program or its successor

program administered by the human services department;

provided, however, that each program's actuarial and benefit

pool and funding streams are maintained, identifiable and

accounted for separately to ensure that respective

beneficiaries obtain the services to which they are entitled.

Section 20. TEMPORARY PROVISION--PUBLIC SCHOOL INSURANCE

AUTHORITY--TRANSFER OF PERSONNEL, PROPERTY, CONTRACTS AND

REFERENCES IN LAW.--On July 1, 2009:

A. as determined by the secretary of finance and

administration upon the advice of the executive director of the

public school insurance authority:

(1) all personnel of the public school

insurance authority whose duties are primarily related to

administering the group health insurance program are

transferred to the health care benefits administration; and

(2) all appropriations, money, records,

equipment, supplies and other property of the public school

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insurance authority that are directly related to administering

the group health insurance program are transferred to the

health care benefits administration;

B. all contracts of the public school insurance

authority that relate to the group health insurance program

shall be binding and effective on the health care benefits

administration; and

C. all references in law to the public school

insurance authority as they relate to the group health

insurance program shall be deemed to be references to the

health care benefits administration.

Section 21. TEMPORARY PROVISION--GROUP BENEFITS

COMMITTEE--TRANSFER OF PERSONNEL, PROPERTY, CONTRACTS AND

REFERENCES IN LAW.--On July 1, 2009:

A. as determined by the secretary of finance and

administration upon the advice of the director of the risk

management division of the general services department, all

personnel, appropriations, money, records, equipment, supplies

and other property of the group benefits committee shall be

transferred to the health care benefits administration;

B. all contracts of the group benefits committee

shall be binding and effective on the health care benefits

administration;

C. all references in law to the group benefits

committee shall be deemed to be references to the health care

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benefits administration;

D. as determined by the secretary of finance and

administration:

(1) all personnel of the general services

department whose duties are primarily related to administering

the provisions of the Group Benefits Act are transferred to the

health care benefits administration; and

(2) all appropriations, money, records,

equipment, supplies and other property of the general services

department that are directly related to administering the

provisions of the Group Benefits Act are transferred to the

health care benefits administration; and

E. all contracts of the general services department

that directly relate to functions performed pursuant to the

Group Benefits Act shall be binding and effective on the health

care benefits administration.

Section 22. TEMPORARY PROVISION--CERTAIN SCHOOL

DISTRICTS--TRANSFER OF PERSONNEL, PROPERTY, CONTRACTS AND

REFERENCES IN LAW.--On July 1, 2009:

A. as determined by the secretary of finance and

administration upon the advice of the superintendent of the

respective school district, all personnel, appropriations,

money, records, equipment, supplies and other property of a

publicly funded health care system of any public school

district with a student enrollment in excess of sixty thousand

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.173788.2GR

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students shall be transferred to the health care benefits

administration;

B. all contracts of a publicly funded health care

system of any public school district with a student enrollment

in excess of sixty thousand students shall be binding and

effective on the health care benefits administration; and

C. all references in law to a publicly funded

health care system of any public school district with a student

enrollment in excess of sixty thousand students shall be deemed

to be references to the health care benefits administration.

Section 23. TEMPORARY PROVISION--NEW MEXICO HEALTH

INSURANCE ALLIANCE--TRANSFER OF PERSONNEL, PROPERTY, CONTRACTS

AND REFERENCES IN LAW.--On July 1, 2010:

A. as determined by the secretary of finance and

administration upon the advice of the executive director of the

New Mexico health insurance alliance, all personnel,

appropriations, money, records, equipment, supplies and other

property of the board of directors of the New Mexico health

insurance alliance shall be transferred to the health care

benefits administration;

B. all contracts of the board of directors of the

New Mexico health insurance alliance shall be binding and

effective on the health care benefits administration; and

C. all references in law to the board of directors

of the New Mexico health insurance alliance shall be deemed to

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be references to the health care benefits administration.

Section 24. TEMPORARY PROVISION--RETIREE HEALTH CARE

AUTHORITY--TRANSFER OF PERSONNEL, PROPERTY, CONTRACTS AND

REFERENCES IN LAW.--On July 1, 2010:

A. as determined by the secretary of finance and

administration upon the advice of the executive director of the

retiree health care authority, all personnel, appropriations,

money, records, equipment, supplies and other property of the

retiree health care authority shall be transferred to the

health care benefits administration;

B. all contracts of the retiree health care

authority shall be binding and effective on the health care

benefits administration; and

C. all references in law to the retiree health care

authority shall be deemed to be references to the health care

benefits administration.

Section 25. TEMPORARY PROVISION--INSURANCE PROGRAMS OF

THE HUMAN SERVICES DEPARTMENT--TRANSFER OF PERSONNEL, PROPERTY

AND CONTRACTS.--On July 1, 2010:

A. as determined by the secretary of finance and

administration upon the advice of the secretary of human

services, all personnel, appropriations, money, records,

equipment, supplies and other property of the human services

department that are directly related to the state-sponsored

premium assistance programs for children and pregnant women

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shall be transferred to the health care benefits

administration; and

B. all contracts of the human services department

that are directly related to the state-sponsored premium

assistance programs shall be binding and effective on the

health care benefits administration.

Section 26. REPEAL.--

A. Sections 9-7-11.1 and 9-7-11.2 NMSA 1978 (being

Laws 1991, Chapter 139, Sections 1 and 2, as amended) are

repealed effective January 1, 2009.

B. Sections 10-7B-3 and 10-7C-6 NMSA 1978 (being

Laws 1989, Chapter 231, Section 3 and Laws 1990, Chapter 6,

Section 6, as amended) are repealed effective July 1, 2009.

Section 27. DELAYED REPEAL.--Section 4 of this act is

repealed effective July 1, 2013.

Section 28. SEVERABILITY.--If any part or application of

this act is held invalid, the remainder or its application to

other situations or persons shall not be affected.

Section 29. EFFECTIVE DATE.--

A. The effective date of the provisions of Section

17 of this act is January 1, 2009.

B. The effective date of the provisions of Sections

10, 12 and 13 of this act is July 1, 2009.

C. The effective date of the provisions of Section

14 of this act is January 1, 2010.

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.173788.2GR

D. The effective date of the provisions of Sections

11, 15 and 16 of this act is July 1, 2010.

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