Health and Health Benefit Legislation of Interest to New Hampshire Employers

By Sarah B. Knowlton and John E. Rich, Jr.

During the 2007 legislative session, the New Hampshire General Court passed a number of bills relating to healthcare and health benefits that may affect or be of interest to New Hampshire businesses. The following is a synopsis of some of the more significant legislation.

House Bill 437 - Recognition of Civil Unions

As of January 1, 2008, employers will be required to offer the same benefits to gay and lesbian couples as are provided to married couples. However, this law will not require employers that have adopted self-insured medical benefit plans under law to change the design of their benefit plans to recognize civil unions. Similarly, this new state law will not affect benefits provided under certain tax qualified retirement plans.

SB 197 - Divorced Spouse Health Care

This bill allows divorced spouses to remain covered on the former spouse's employer-provided group health policy for up to three years following a divorce. This coverage is in addition to three year continuation right currently provided by federal COBRA and New Hampshire's continuation coverage law. The three year coverage terminates upon the remarriage of either the spouse or the employee. Unlike COBRA or state continuation coverage, employers will not be allowed to directly charge the divorced spouse for the continued health insurance. Because former spouses are not dependents for federal tax purposes, employers will be required to include the value of the ex-spouse's coverage on the employee's Form W-2. For the same reason, employees are not allowed to pay for the cost of the coverage on a pre-tax basis through a Section 125 plan.

HB 921 - Restructuring of Health Care Continuation Coverage

This law imposes significant changes in the way health care continuation coverage is administered in New Hampshire starting in 2008. Insurance companies, not employers will be required to administer coverage continuation notice, election and premium collection obligations. Prior to amendment, New Hampshire law mirrored the federal COBRA statute which imposes ultimate responsibility for administration on employers. Employers with 20 or more employees subject to both state continuation coverage and federal COBRA will need to coordinate with their insurance carriers to ensure compliance with both the state continuation law and federal COBRA.

HB 790 - Coverage of Dependents to Age 26

Employers providing health coverage through insured plans will now be required to allow children of employees to stay on the employer's plan until the child reaches age 26 as long as the dependent is unmarried, a resident of New Hampshire or a student and not provided coverage under another plan. Employers will be required to offer a special open enrollment period from August 1 through September 30, 2007 for newly eligible dependants. The New Hampshire law does not coordinate with the federal Tax Code definition of dependant resulting in adverse tax consequences to employees who provide dependant children coverage under this law. As with the divorced spouse coverage, employers will be required to include the cost of the coverage on the employee's W-2 for those adult children who are not federal tax dependants. Employees will also not be permitted to pay the cost of employee portion of the coverage on a pre-tax basis through a Section 125 plan.

SB 135, HB 305, and HB 727-FN - Commissions to Study the Cost of Health Insurance For Small Businesses and Others

In recognition of the significant challenges associated with obtaining and maintaining health insurance, the legislature established three commissions to study the cost and availability of health insurance. SB 135 creates a commission to study lowering the costs of health insurance for small businesses, HB 305 creates a task force to develop legislation for expanding access to affordable health insurance, and HB 727-FN establishes a commission to study health insurance coverage in the construction industry. Look for the commissions and task force recommendations on November 1, 2007.

HB 158 - Supplies of Prescription Drugs

As of August 10, 2007, insurance companies will be required to allow subscribers to purchase up to a 90 day supply of covered prescription drugs on the health plan formulary so long as the subscriber has been taking the drug continuously for one year and the drug is not subject to the insurer's utilization management prior authorization or pre-certification requirements.

SB 42-FN - Limitations on Smoking

As of September 17, 2007, smoking will be prohibited in restaurants, which is defined to include any room or place in resorts, hotels, and motels, and cocktail lounges. In addition, SB 42-FN prohibits smoking in public educational facilities, in licensed child care agencies during the hours of operation, and enclosed places owned and operated by social, fraternal or religious organizations when open to the general public (such as for public meetings, voting, suppers, bingo games, theatrical events, fairs and bazaars).

HB 926 - FN - Pharmacy Regulation

This bill requires the New Hampshire Pharmacy Board to adopt regulations allowing the use of automated pharmacy systems used to dispense controlled and non-controlled prescription drugs in long term care facilities and hospice facilities. The legislation also clarifies that it is not unlawful for family members or caregivers to possess prescription drugs of others so long as they intend to deliver the prescription drug to the person for whom it was prescribed.

HB 43 - Medicaid Payments to Hospitals

This legislation creates a committee to study Medicaid payments to hospital-based physicians and outpatient services. The bill prohibits any change to Medicaid reimbursement policies and rates for such services in effect as of January 1, 2007 until the legislature or fiscal committee takes further action.

Sarah B. Knowlton is a Director at McLane, Graf, Raulerson & Middleton, Professional Association who specializes in healthcare law and co-chair of McLane's Healthcare Practice Group. Sarah can be contacted directly at (603) 334-6928 or at sarah.knowlton@mclane.com. John E. Rich, Jr. is a Director at McLane, Graf, Raulerson & Middleton, Professional Association who specializes in employee benefits, pension, ERISA and tax-related matters. He can be contacted directly at (603) 628-1438, or by email at john.rich@mclane.com.