A state legislator said Wednesday that though his name is on the letterhead and a signature line, he doesn't remember writing or approving a letter saying a committee had formally accepted a recommendation on the fee that should be charged to insurance companies offering plans on the state's health insurance exchange.
The Dec. 11 letter describes the activities of the Arkansas Health Insurance Marketplace Legislative Oversight Committee during 2015, including an Oct. 22 meeting in which the chairman of the Arkansas Health Insurance Marketplace's board of directors reported the board's recommendation on the fee.
"A motion was made to accept the Board's recommendation, and the motion was affirmed by the Oversight Committee," the letter says.
That didn't happen during the meeting, however. Lawmakers asked questions about the fee, but no one made a motion on the recommendation, and the committee took no action on it during the meeting. The committee hasn't met since then.
Addressed to Senate President Pro Tempore Jonathan Dismang, the letter bears the names of the committee chairmen -- Rep. Stephen Magie, D-Conway, and Sen. David Sanders, R-Little Rock -- on its letterhead and signature lines, with their names printed in cursive script in place of handwritten signatures.
Officials with the Arkansas Health Insurance Marketplace, an agency created by the Legislature in 2013, have cited the letter as evidence that the Legislature has approved the fee the agency plans to start collecting from insurance companies as soon as Dec. 1.
The fee, equal to 3 percent of the premiums for the plans sold on the exchange, will provide a source of revenue for the Arkansas Health Insurance Marketplace, which will not be able to spend federal grant money on operations after Dec. 31.
The exchange fees are ultimately paid by consumers, through monthly premiums, in the individual and small group markets, as well as by the federal government, which subsidizes the premiums for many consumers.
Magie said Wednesday that he doesn't remember what happened at the Oct. 22 meeting and doesn't know who wrote the letter.
"I think the first time I saw it was when it was forwarded to me in the last week or so," Magie said. "It might have been sent to me by email, and I just don't recall it."
Asked about the letter and fee on Wednesday, Sanders said in an email that he was looking into the matter.
"Ultimately, the Legislature is going to have to take action when we convene" next year, he said.
Marty Garrity, director of the Bureau of Legislative Research, said the letter was likely drafted by bureau staff members Phil Price and Juanita Witham, whose initials are on the letter along with those of Magie and Sanders.
Garrity said she was researching the circumstances surrounding the letter's drafting on Wednesday.
In an email Tuesday, Health Insurance Marketplace spokesman Alicia McCoy said the agency has met the legal requirements to begin collecting a fee even though it hasn't been approved by the full Legislature.
Act 1500 of 2013 says the Legislature "shall establish a reasonable initial assessment or user fee and reasonable increases or decreases in the amount of future assessments."
McCoy cited other parts of the law, the board's recommendation on Sept. 30 and the Dec. 11 letter describing the Oct. 22 legislative oversight committee meeting as the basis for the marketplace's plan to start collecting the fee.
The 2013 law requires the Arkansas Health Insurance Marketplace's board to make a recommendation on the fee each year by Oct. 1 and for the oversight committee to report the board's recommendation, along with the committee's own opinion, to the speaker of the House and president pro tempore of the Senate.
"Act 1500 gave AHIM the authority to assess user fees, and this was done at the Sept. 2015 board meeting," McCoy said Tuesday's email.
Gov. Asa Hutchinson agrees with the board's interpretation of the law, his spokesmen said.
The oversight committee "had an input on the user fees," spokesman Kendall Marr said in an Aug. 24 email to the Arkansas Democrat-Gazette. "The 3% user fee for the exchange was approved in compliance with state law."
Magie said Wednesday that he didn't know the law's current requirements, but said any such fees should at least be subject to the approval of the Legislative Council, which is the Legislature's governing body when lawmakers are not in session.
If that's not the case, lawmakers should address the issue during the 2017 session, he said.
"That's taxpayers' dollars, and that needs to be under the guidance of the entire Legislature," Magie said.
Three other oversight committee members -- Sens. Jason Rapert, R-Bigelow, Cecile Bledsoe, R-Rogers, and David Burnett, D-Osceola -- said Wednesday they thought that Act 1500 already requires the full Legislature to approve the fee.
"I think they do need legislative approval" to impose the fee, Bledsoe said. "I would think it would not be wise on their part to do it without legislative approval."
Rapert also questioned why the oversight committee hasn't met since Oct. 22.
The law that created the committee and the Health Insurance Marketplace requires the committee to meet "at least quarterly upon the joint call" of the two chairmen.
"If the committee hasn't met since October, we haven't actually fulfilled the spirit of the statute," Rapert said. "That's something I think that is problematic for me."
Magie said there hasn't been a need for the committee to meet.
The Health Insurance Marketplace board has "been doing a pretty fair job, and there hasn't been any contentious issues come up to discuss," Magie said.
The committee's other members -- Sens. Ronald Caldwell, R-Wynne, and Linda Chesterfield, D-Little Rock, and Reps. Eddie Armstrong, D-North Little Rock, Mary Bentley, R-Perryville, Deborah Ferguson, D-West Memphis, and Julie Mayberry, R-Hensley -- didn't return calls seeking comment Wednesday.
Former state Rep. Mark Biviano, the lead sponsor of Act 1500, said Tuesday that he intended the Legislature to have final approval over the fee.
The Health Insurance Marketplace officials' interpretation of the law is "a reasonable argument, but ultimately I do believe that it should lie with the legislative body to make the decision," Biviano said Tuesday.
Dismang, R-Beebe, who also sponsored Act 1500, and House Speaker Jeremy Gillam, R-Judsonia, said Tuesday that they would research the requirements for setting the fee.
According to a Health Insurance Marketplace memo, the fee would generate about $10.7 million in annual revenue.
Half of the money is to go to the federal government, which handles the systems for enrolling individual consumers through healthcare. gov.
The rest of the money is to support the state Health Insurance Marketplace, which under a proposal by Hutchinson would be responsible for certifying plans available to Arkansans on the federal website and offering one-on-one help to applicants.
Currently, the Health Insurance Marketplace's only source of revenue is a $99.9 million federal grant that it received in late 2014. Money from the grant can't be spent on operations after Dec. 31.
The 3 percent fee would replace a 3.5 percent fee that has been collected by the U.S. Department of Health and Human Services' Centers for Medicare and Medicaid Services since enrollment on the federal exchanges began in 2014.
Under the 2010 Patient Protection and Affordable Care Act, health insurance exchanges allow consumers to shop for coverage and apply for subsidies to help pay for it.
The federal exchange fee is not assessed against exchange plans covering more than 258,000 low-income adults whose premiums are paid by Medicaid under the so-called private option.
The fee is assessed on non-Medicaid plans that were covering 61,189 Arkansans as of Aug. 15. Coverage in those plans is subsidized for many people who don't qualify for Medicaid and who have incomes below 400 percent of the federal poverty level: $47,520 for an individual, for instance, or $97,200 for a family of four.
The Health Insurance Marketplace's small-business exchange was covering 171 employees and 66 spouses or dependents from 44 businesses as of April, and the federal small-business exchange was covering 49 employees and 36 spouses or dependents from 11 businesses, a spokesman for Arkansas Blue Cross and Blue Shield said. The company is the only one offering plans on the small-business exchanges.
A Section on 09/08/2016