2008 Bills Vetoed by the Governor - SB

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March 14, 2008

The Honorable Dennis Daugaard
President of the Senate
500 East Capitol Avenue
Pierre, SD 57501-5070

Dear Mr. President and Members of the Senate,

I hereby return Senate Bill 129, and pursuant to Article IV, Section 4, I hereby veto Senate Bill 129 entitled An Act to revise the grounds for which continuation or conversion is not required for group health policies.     

The intent behind SB 129 and the focus of the bill in making the state's continuation rights more consistent with the federal COBRA law is the right direction for South Dakota's group health insurance market. Moving in that direction allows group health insurers the ability to treat employers regardless of size the same way and lessen administrative burdens on both the group health insurers and employers in this state.

However, there is a subset of the population of individuals who would lose group coverage when an employer is nonrenewed due to the employer not meeting an insurer's participation or contribution requirements that could fall through the safety net provided under current law. Most individuals covered under group plans whose coverage would be cancelled would have other alternatives either due to their ability to pass underwriting and purchase an individual policy or having at least 12 months of creditable coverage and qualifying for the risk pool. In addition, others in this situation have an option for those insurers offering a guaranteed conversion plan. However, there are still some employees or dependents that would have none of these options available to them. Those few individuals without other options would become uninsurable if Senate Bill 129 were to pass. This outweighs the positive aspects of Senate Bill 129.

I therefore respectfully veto SB 129, and request your concurrence with my action.

Respectfully submitted,
M. Michael Rounds
Governor

cc:    The Honorable Thomas J. Deadrick
    The Honorable Chris Nelson