LITTLE ROCK — A legislative panel on Wednesday voted to endorse a plan by the Arkansas Health Insurance Marketplace to begin collecting a 3 percent fee on insurance plans offered through the marketplace to individuals.
A co-chairman of the panel said after the vote that the state law setting forth the procedure for establishing a user fee is “vague” and probably should be revised during next year’s legislative session to make it clearer.
Act 1300 of 2013 states that the Arkansas Health Insurance Marketplace Legislative Oversight Committee “shall review the recommendations of the Arkansas Health Insurance Marketplace … and report to the president pro tempore of the Senate and the speaker of the House of Representatives the committee’s recommendations for the initial assessment or user fee and future increases or decreases in the amounts of assessments or user fees.”
The oversight panel conducted a review Wednesday and signed off on the proposed 3 percent fee in a voice vote with no “no” votes heard. But members also noted that there was some apparent confusion over the correct procedure, because the marketplace had already told insurance companies in an Aug. 19 letter that it would begin collecting the fee Dec. 1.
Sen. Jason Rapert, R-Bigelow, quoted the law’s language regarding a review by the oversight panel.
“Does that not clearly indicate that there is an expectation that the Legislative Oversight Committee actually will make a recommendation to the pro tem and to the speaker on whether they feel like these should be increased or decreased?” Rapert asked.
Matthew Miller, assistant director for legal services with the state Bureau of Legislative Research, said that “this oversight committee has duties under this statute, and you have the right to interpret those duties. If this group interprets it that way, I think that’s totally within your power to do so.”
The fee of 3 percent of the premium amounts on marketplace plans will replace a 3.5 percent fee that the federal government has been collecting from insurance companies to fund the marketplace. The Arkansas Health Insurance Marketplace will take over responsibility for the individual exchange next year, although Arkansans will continue to enroll through the federal enrollment system at healthcare.gov.
Mike Castleberry, chairman of the Arkansas Health Insurance Marketplace Board of Directors, said the Aug. 19 letter he sent to insurance companies was intended to give them time to prepare for the change.
“Based on all of the conversations we’d had up until that point, we felt pretty clear that the 3 percent was going to be the right number and that we were OK to start working to collect that,” he said.
Castleberry acknowledged that although the planned 3 percent fee is a reduction and therefore not likely to be controversial, in a future year the board may propose increasing the fee, which would be “a whole 'nother conversation.” He said the board would follow whatever procedure the committee wants it to follow.
“If you need to rewrite something, that’s your prerogative, and we’ll be more than happy to work with you on that or just support you or follow your directions,” he said.
Sen. David Sanders, R-Little Rock, co-chairman of the oversight panel, told reporters after the meeting he believed the procedural requirements for establishing the fee had been met with Wednesday’s action. He said the committee would present a report to the House and Senate leaders, but he did not believe any action was required from them.
Regarding Act 1300, Sanders said, “It is vague, but I think they’re currently operating within the statute. … I think moving forward we probably want to spell it out a little more.”