May 14, 2009, Introduced by Senators PAPPAGEORGE, GEORGE, BIRKHOLZ, PATTERSON, HARDIMAN, BARCIA, JANSEN, CROPSEY, BROWN and CASSIS and referred to the Committee on Health Policy.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2213b, 3406f, 3501, 3503, 3519, and 3539 (MCL
500.2213b, 500.3406f, 500.3501, 500.3503, 500.3519, and 500.3539),
section 2213b as amended by 1998 PA 457, section 3406f as added by
1996 PA 517, section 3501 as added by 2000 PA 252, section 3503 as
amended by 2006 PA 366, and sections 3519 and 3539 as amended by
2005 PA 306, and by adding section 3406s and chapter 37A.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2213b. (1) Except as provided in this section, an insurer
that delivers, issues for delivery, or renews in this state an
expense-incurred hospital, medical, or surgical individual policy
under chapter 34 shall renew or continue in force the policy at the
option of the individual. This subsection does not apply to a
health benefit plan as defined in section 3751.
(2) Except as provided in this section and section 3711, an
insurer that delivers, issues for delivery, or renews in this state
an expense-incurred hospital, medical, or surgical group policy or
certificate under chapter 36 shall renew or continue in force the
policy or certificate at the option of the sponsor of the plan.
(3) Guaranteed renewal is not required in cases of fraud,
intentional misrepresentation of material fact, lack of payment, if
the insurer no longer offers that particular type of coverage in
the market, or if the individual or group moves outside the service
area.
(4) Subsections (1), (2), and (3) do not apply to a short-term
or 1-time limited duration policy or certificate of no longer than
6 months.
(5) For the purposes of this section and section 3406f, a
short-term or 1-time limited duration policy or certificate of no
longer than 6 months is an individual health policy that meets all
of the following:
(a) Is issued to provide coverage for a period of 185 days or
less, except that the health policy may permit a limited extension
of benefits after the date the policy ended solely for expenses
attributable to a condition for which a covered person incurred
expenses during the term of the policy.
(b) Is nonrenewable, provided that the health insurer may
provide coverage for 1 or more subsequent periods that satisfy
subdivision (a), if the total of the periods of coverage do not
exceed a total of 185 days out of any 365-day period, plus any
additional days permitted by the policy for a condition for which a
covered person incurred expenses during the term of the policy.
(c) Does not cover any preexisting conditions.
(d) Is available with an immediate effective date, without
underwriting, upon receipt by the insurer of a completed
application indicating eligibility under the health insurer's
eligibility requirements, except that coverage that includes
optional benefits may be offered on a basis that does not meet this
requirement.
(6) An insurer that delivers, issues for delivery, or renews
in this state a short-term or 1-time limited duration policy or
certificate
of no longer than 6 months shall provide the following
to
the commissioner:
(a)
By no later than February 1,
1999, a written report that
discloses
both of the following:
(i) The gross written premium for short-term or 1-time
limited
duration
policies or certificates of no longer than 6 months issued
in
this state during the 1996 calendar year.
(ii) The gross written premium for all individual
expense-
incurred
hospital, medical, or surgical policies or certificates
issued
or delivered in this state during the 1996 calendar year
other
than policies or certificates described in subparagraph (i).
(b)
By by no later than March 31, 1999
and annually thereafter
,
a written annual report to the commissioner that discloses both
of the following:
(a) (i) The
gross written premium for short-term or 1-time
limited duration policies or certificates issued in this state
during the preceding calendar year.
(b) (ii) The
gross written premium for all individual expense-
incurred hospital, medical, or surgical policies or certificates
issued or delivered in this state during the preceding calendar
year
other than policies or certificates described in subparagraph
(i) subdivision
(a).
(7) The commissioner shall maintain copies of reports prepared
pursuant to subsection (6) on file with the annual statement of
each reporting insurer. The commissioner shall annually compile the
reports received under subsection (6). The commissioner shall
provide this annual compilation to the senate and house of
representatives standing committees on insurance issues no later
than
the June 1 immediately following the February 1 or March 31
date for which the reports under subsection (6) are provided.
(8) In each calendar year, a health insurer shall not continue
to issue short-term or 1-time limited duration policies or
certificates if to do so the collective gross written premiums on
those policies or certificates would total more than 10% of the
collective gross written premiums for all individual expense-
incurred hospital, medical, or surgical policies or certificates
issued or delivered in this state either directly by that insurer
or through a corporation that owns or is owned by that insurer.
Sec. 3406f. (1) An insurer may exclude or limit coverage for a
condition
as follows:
(a)
For an individual covered under an individual policy or
certificate
or any other policy or certificate not covered under
subdivision
(b) or (c), only if the exclusion or limitation relates
to
a condition for which medical advice, diagnosis, care, or
treatment
was recommended or received within 6 months before
enrollment
and the exclusion or limitation does not extend for more
than
12 months after the effective date of the policy or
certificate.
(b)
For an individual covered under a group policy or
certificate
covering 2 to 50 individuals, only if the exclusion or
limitation
relates to a condition for which medical advice,
diagnosis,
care, or treatment was recommended or received within 6
months
before enrollment and the exclusion or limitation does not
extend
for more than 12 months after the effective date of the
policy
or certificate.
(c)
For for an individual covered under a group policy or
certificate covering more than 50 individuals, only if the
exclusion or limitation relates to a condition for which medical
advice, diagnosis, care, or treatment was recommended or received
within 6 months before enrollment and the exclusion or limitation
does not extend for more than 6 months after the effective date of
the policy or certificate.
(2) As used in this section, "group" means a group health plan
as
defined in section 2791(a)(1) and (2) of part C of title XXVII
of
the public health service act, chapter 373, 110 Stat. 1972, 42
U.S.C.
300gg-91 42 USC 300gg-91, and includes government plans that
are not federal government plans.
(3) This section applies only to an insurer that delivers,
issues for delivery, or renews in this state an expense-incurred
hospital, medical, or surgical policy or certificate. This section
does not apply to any policy or certificate that provides coverage
for specific diseases or accidents only, or to any hospital
indemnity, medicare supplement, long-term care, disability income,
or 1-time limited duration policy or certificate of no longer than
6 months.
(4)
The commissioner and the director of community health
shall
examine the issue of crediting prior continuous health care
coverage
to reduce the period of time imposed by preexisting
condition
limitations or exclusions under subsection (1)(a), (b),
and
(c) and shall report to the governor and the senate and the
house
of representatives standing committees on insurance and
health
policy issues by May 15, 1997. The report shall include the
commissioner's
and director's findings and shall propose
alternative
mechanisms or a combination of mechanisms to credit
prior
continuous health care coverage towards the period of time
imposed
by a preexisting condition limitation or exclusion. The
report
shall address at a minimum all of the following:
(a)
Cost of crediting prior continuous health care coverages.
(b)
Period of lapse or break in coverage, if any, permitted in
a
prior health care coverage.
(c)
Types and scope of prior health care coverages that are
permitted
to be credited.
(d)
Any exceptions or exclusions to crediting prior health
care
coverage.
(e)
Uniform method of certifying periods of prior creditable
coverage.
Sec. 3406s. (1) If the cover Michigan board determines that
section 3406a, 3406b, 3406c, 3406d, 3406e, 3406m, 3406n, 3406p,
3406q, 3406r, 3425, 3609a, 3613, 3614, 3615, 3616, or 3616a should
be waived as provided in section 8 of the MI-Health act, then the
sections so identified by the cover Michigan board are not required
to be provided or offered in an eligible health coverage plan.
(2) As used in this section:
(a) "Cover Michigan board" means the cover Michigan board
created in section 5 of the MI-Health act.
(b) "Eligible health coverage plan" means that term as defined
in section 3 of the MI-Health act.
Sec. 3501. As used in this chapter:
(a) "Affiliated provider" means a health professional,
licensed hospital, licensed pharmacy, or any other institution,
organization, or person having a contract with a health maintenance
organization to render 1 or more health maintenance services to an
enrollee.
(b) "Basic health services" means:
(i) Physician services including consultant and referral
services by a physician, but not including psychiatric services.
(ii) Ambulatory services.
(iii) Inpatient hospital services, other than those for the
treatment of mental illness.
(iv) Emergency health services.
(v) Outpatient mental health services, not fewer than 20
visits per year.
(vi) Intermediate and outpatient care for substance abuse as
follows:
(A) For group contracts, if the fees for a group contract
would be increased by 3% or more because of the provision of
services under this subparagraph, the group subscriber may decline
the services. For individual contracts, if the total fees for all
individual contracts would be increased by 3% or more because of
the provision of the services required under this subparagraph in
all of those contracts, the named subscriber of each contract may
decline the services.
(B) Charges, terms, and conditions for the services required
to be provided under this subparagraph shall not be less favorable
than the maximum prescribed for any other comparable service.
(C) The services required to be provided under this
subparagraph shall not be reduced by terms or conditions that apply
to other services in a group or individual contract. This sub-
subparagraph shall not be construed to prohibit contracts that
provide for deductibles and copayment provisions for services for
intermediate and outpatient care for substance abuse.
(D) The services required to be provided under this
subparagraph shall, at a minimum, provide for up to $2,968.00 in
services for intermediate and outpatient care for substance abuse
per individual per year. This minimum shall be adjusted annually by
March 31 each year in accordance with the annual average percentage
increase or decrease in the United States consumer price index for
the 12-month period ending the preceding December 31.
(E) As used in this subparagraph, "intermediate care",
"outpatient care", and "substance abuse" have those meanings
ascribed to them in section 3425.
(vii) Diagnostic laboratory and diagnostic and therapeutic
radiological services.
(viii) Home health services.
(ix) Preventive health services.
(c) "Credentialing verification" means the process of
obtaining and verifying information about a health professional and
evaluating that health professional when that health professional
applies to become a participating provider with a health
maintenance organization.
(d) "Enrollee" means an individual who is entitled to receive
health maintenance services under a health maintenance contract.
(e) "Health maintenance contract" means a contract between a
health maintenance organization and a subscriber or group of
subscribers, to provide, when medically indicated, designated
health maintenance services, as described in and pursuant to the
terms
of the contract. , including, Except for health maintenance
organization contracts that are eligible health coverage plans
under the MI-Health act, a health maintenance contract shall
include, at a minimum, basic health maintenance services. Health
maintenance contract includes a prudent purchaser contract.
(f) "Health maintenance organization" means an entity that
does the following:
(i) Delivers health maintenance services that are medically
indicated to enrollees under the terms of its health maintenance
contract, directly or through contracts with affiliated providers,
in exchange for a fixed prepaid sum or per capita prepayment,
without regard to the frequency, extent, or kind of health
services.
(ii) Is responsible for the availability, accessibility, and
quality of the health maintenance services provided.
(g) "Health maintenance services" means services provided to
enrollees of a health maintenance organization under their health
maintenance contract.
(h) "Health professional" means an individual licensed,
certified, or authorized in accordance with state law to practice a
health profession in his or her respective state.
(i) "Primary verification" means verification by the health
maintenance organization of a health professional's credentials
based upon evidence obtained from the issuing source of the
credential.
(j) "Prudent purchaser contract" means a contract offered by a
health maintenance organization to groups or to individuals under
which enrollees who select to obtain health care services directly
from the organization or through its affiliated providers receive a
financial advantage or other advantage by selecting those
providers.
(k) "Secondary verification" means verification by the health
maintenance organization of a health professional's credentials
based upon evidence obtained by means other than direct contact
with the issuing source of the credential.
(l) "Service area" means a defined geographical area in which
health maintenance services are generally available and readily
accessible to enrollees and where health maintenance organizations
may market their contracts.
(m) "Subscriber" means an individual who enters into a health
maintenance contract, or on whose behalf a health maintenance
contract is entered into, with a health maintenance organization
that has received a certificate of authority under this chapter and
to whom a health maintenance contract is issued.
Sec. 3503. (1) All of the provisions of this act that apply to
a domestic insurer authorized to issue an expense-incurred
hospital, medical, or surgical policy or certificate, including,
but
not limited to, sections 223 and 7925 and chapters 34, and
36,
and 37A apply to a health maintenance organization under this
chapter unless specifically excluded, or otherwise specifically
provided for in this chapter.
(2) Sections 408, 410, 411, 901, and 5208, chapter 77, and,
except as otherwise provided in subsection (1), chapter 79 do not
apply to a health maintenance organization.
Sec. 3519. (1) A health maintenance organization contract and
the contract's rates, including any deductibles, copayments, and
coinsurances, between the organization and its subscribers shall be
fair, sound, and reasonable in relation to the services provided,
and the procedures for offering and terminating contracts shall not
be unfairly discriminatory.
(2) A health maintenance organization contract and the
contract's rates shall not discriminate on the basis of race,
color, creed, national origin, residence within the approved
service area of the health maintenance organization, lawful
occupation, sex, handicap, or marital status, except that marital
status may be used to classify individuals or risks for the purpose
of insuring family units. The commissioner may approve a rate
differential based on sex, age, residence, disability, marital
status, or lawful occupation, if the differential is supported by
sound actuarial principles, a reasonable classification system, and
is related to the actual and credible loss statistics or reasonably
anticipated experience for new coverages. A healthy lifestyle
program as defined in section 3517(2) is not subject to the
commissioner's approval under this subsection and is not required
to be supported by sound actuarial principles, a reasonable
classification system, or be related to actual and credible loss
statistics or reasonably anticipated experience for new coverages.
(3) All health maintenance organization contracts, except
health maintenance organization contracts that are eligible health
coverage plans under the MI-Health act, shall include, at a
minimum, basic health services.
Sec.
3539. (1) For an individual covered under a nongroup
contract
or under a contract not covered under subsection (2), a
health
maintenance organization may exclude or limit coverage for a
condition
only if the exclusion or limitation relates to a
condition
for which medical advice, diagnosis, care, or treatment
was
recommended or received within 6 months before enrollment and
the
exclusion or limitation does not extend for more than 6 months
after
the effective date of the health maintenance contract.
(1) (2)
A health maintenance organization
shall not exclude or
limit coverage for a preexisting condition for an individual
covered under a group contract.
(3)
Except as provided in subsection (5), a health maintenance
organization
that has issued a nongroup contract shall renew or
continue
in force the contract at the option of the individual.
(2) (4)
Except as provided in subsection (5)
(3) and section
3711, a health maintenance organization that has issued a group
contract shall renew or continue in force the contract at the
option of the sponsor of the plan.
(3) (5)
Guaranteed renewal is not required
in cases of fraud,
intentional misrepresentation of material fact, lack of payment, if
the health maintenance organization no longer offers that
particular type of coverage in the market, or if the individual or
group moves outside the service area.
(4) (6)
A health maintenance organization
is not required to
continue a healthy lifestyle program or to continue any incentive
associated with a healthy lifestyle program, including, but not
limited to, goods, vouchers, or equipment.
(5) (7)
As used in this section,
"group" means a group of 2 or
more subscribers.
CHAPTER 37A
INDIVIDUAL HEALTH BENEFIT PLANS
Sec. 3751. As used in this chapter:
(a) "Board" means the Michigan claims board created in section
3771.
(b) "Carrier" means a person that provides health benefits,
coverage, or insurance to an individual in this state. For the
purposes of this chapter, carrier includes a health insurance
company authorized to do business in this state, a nonprofit health
care corporation, a health maintenance organization, or any other
person providing a plan of health benefits, coverage, or insurance
subject to state insurance regulation. Carrier does not include a
health maintenance organization that provides only medicaid
coverage.
(c) "Commercial carrier" means an individual carrier other
than a nonprofit health care corporation or health maintenance
organization.
(d) "Eligible claim" means any claim covered under any health
benefit plan.
(e) "Eligible health coverage plan" means that term as defined
in section 3 of the MI-Health act.
(f) "Health benefit plan" or "plan" means an individual
expense-incurred hospital, medical, or surgical policy, nonprofit
health care corporation certificate, or health maintenance
organization contract and includes an eligible health coverage
plan. Health benefit plan does not include accident-only, credit,
or disability income insurance; long-term care insurance; medicare
supplemental coverage; coverage issued as a supplement to liability
insurance; coverage only for a specified disease or illness;
dental-only or vision-only insurance; worker's compensation or
similar insurance; automobile medical-payment insurance; or
medicaid or medicare coverage.
(g) "Medicaid" means a program for medical assistance
established under title XIX of the social security act, 42 USC 1396
to 1396v.
(h) "Medicare" means the federal medicare program established
under title XVIII of the social security act, 42 USC 1395 to
1395hhh.
(i) "Nonprofit health care corporation" means a nonprofit
health care corporation operating pursuant to the nonprofit health
care corporation reform act, 1980 PA 350, MCL 550.1101 to 550.1704.
(j) "Short-term or 1-time limited duration benefit plan of no
longer than 6 months" means an individual health benefit plan that
meets all of the following:
(i) Is issued to provide coverage for a period of 185 days or
less, except that the health benefit plan may permit a limited
extension of benefits after the date the plan ended solely for
expenses attributable to a condition for which a covered person
incurred expenses during the term of the plan.
(ii) Is nonrenewable, provided that the carrier may provide
coverage for 1 or more subsequent periods that satisfy subparagraph
(i), if the total of the periods of coverage do not exceed a total
of 185 days out of any 365-day period, plus any additional days
permitted by the plan for a condition for which a covered person
incurred expenses during the term of the plan.
(iii) Does not cover any preexisting conditions.
(iv) Is available with an immediate effective date, without
underwriting, upon receipt by the carrier of a completed
application indicating eligibility under the carrier's eligibility
requirements, except that coverage that includes optional benefits
may be offered on a basis that does not meet this requirement.
Sec. 3753. This chapter applies to any individual health
benefit plan that is subject to policy form or premium approval by
the commissioner.
Sec. 3755. (1) A carrier may exclude or limit coverage under a
health benefit plan for a condition only if the exclusion or
limitation relates to a condition for which medical advice,
diagnosis, care, or treatment was recommended or received within 6
months before enrollment and the exclusion or limitation does not
extend for more than 6 months after the effective date of the
policy, certificate, or contract.
(2) Notwithstanding subsection (1), a carrier shall not
exclude or limit coverage for a preexisting condition or provide a
waiting period if all of the following apply:
(a) The individual's most recent health care coverage prior to
applying for coverage with the carrier was under a group health
plan.
(b) The individual was continuously covered prior to the
application for coverage with the carrier under 1 or more health
plans for an aggregate of at least 18 months with no break in
coverage that exceeded 62 days.
(c) The individual is no longer eligible for group coverage
and is not eligible for medicare or medicaid.
(d) The individual did not lose eligibility for coverage for
failure to pay any required contribution or for an act to defraud
any carrier.
(e) If the individual was eligible for continuation of health
coverage from that group health plan pursuant to the consolidated
omnibus budget reconciliation act of 1985, Public Law 99-272, he or
she has elected and exhausted the coverage.
(3) As used in this section, "group health plan" means a group
health benefit plan that covers 2 or more insureds, subscribers,
members, enrollees, or employees.
Sec. 3757. Notwithstanding any other provision of this act, a
carrier shall not rescind, cancel, or limit a health benefit plan
due to the carrier's failure to complete medical underwriting and
resolve all reasonable questions arising from the written
information submitted on or with an application before issuing the
plan's contract. This section does not limit a carrier's remedies
upon a showing of intentional misrepresentation of material fact.
Sec. 3759. Rate differentials for health conditions may be
used only when coverage is initially issued and cannot be changed
by a carrier at any time after issue as a result of subsequent
changes in health conditions of individuals already covered under
the health benefit plan. A carrier may use rate differentials based
on health conditions for any individual who is subsequently added
to the health benefit plan only at the time the individual is added
to the plan.
Sec. 3761. (1) Except as otherwise provided in this section, a
carrier that has issued a health benefit plan shall renew or
continue in force the plan at the option of the individual.
(2) A guaranteed renewal under subsection (1) is not required
in cases of fraud, intentional misrepresentation of material fact,
lack of payment, if the carrier no longer offers that plan, if the
carrier no longer offers coverage in the individual market, or if
the individual moves outside the carrier's service area.
(3) A carrier shall not discontinue offering a particular plan
in the individual market unless the carrier does all of the
following:
(a) Provides notice to each covered individual provided
coverage under the plan of the discontinuation at least 90 days
prior to the date of the discontinuation.
(b) Offers to each individual in the individual market
provided this plan the option to purchase any other plan currently
being offered in the individual market.
(c) Acts uniformly without regard to any health status factor
of enrolled individuals or individuals who may become eligible for
coverage in making the determination to discontinue coverage and in
offering other plans.
(4) A carrier shall not discontinue offering all coverage in
the individual market unless the carrier does all of the following:
(a) Provides notice to the commissioner and to each individual
of the discontinuation at least 180 days prior to the date of the
expiration of coverage.
(b) Discontinues all health benefit plans issued in the
individual market and does not renew coverage under such plans.
(5) If a carrier discontinues coverage under subsection (4),
the carrier shall not provide for the issuance of any health
benefit plans in the individual market during the 5-year period
beginning on the date of the discontinuation of the last plan not
so renewed.
(6) Subsections (1) through (5) do not apply to a short-term
or 1-time limited duration benefit plan of no longer than 6 months.
Sec. 3763. (1) A carrier shall not, directly or indirectly,
engage in any of the following:
(a) Encouraging or directing an individual to refrain from
filing an application for a health benefit plan with the carrier
because of the health condition or claims experience of the
individual.
(b) Encouraging or directing an individual to seek coverage
from another carrier because of the health condition or claims
experience of the individual.
(2) Except as provided in subsection (3), a carrier shall not,
directly or indirectly, enter into any contract, agreement, or
arrangement with a producer that provides for or results in the
compensation paid to a producer for the sale of a health benefit
plan to be varied because of the health condition or claims
experience of the individual.
(3) Subsection (2) does not apply to a compensation
arrangement that provides compensation to a producer on the basis
of percentage of premium, provided that the percentage does not
vary because of the health condition or claims experience of the
individual.
(4) A carrier shall not terminate, fail to renew, or limit its
contract or agreement of representation with a producer for any
reason related to the health condition or claims experience of the
individual placed by the producer with the carrier.
Sec. 3771. (1) The Michigan claims board is created within the
office of financial and insurance regulation.
(2) The board shall consist of the commissioner and the
following 6 members, appointed by the commissioner:
(a) One member representing nonprofit health care
corporations.
(b) One member representing health maintenance organizations,
but not health maintenance organizations owned by a nonprofit
health care corporation.
(c) One member representing commercial carriers.
(d) One member representing the general public.
(e) One member who is a health economist.
(f) One member who is in good standing with the American
academy of actuaries.
(3) The members first appointed to the board shall be
appointed within 14 days after the effective date of this chapter.
(4) Members of the board shall serve for terms of 4 years or
until a successor is appointed, whichever is later, except that of
the members first appointed, 2 shall serve for 2 years, 2 shall
serve for 3 years, and 2 shall serve for 4 years.
(5) If a vacancy occurs on the board, the commissioner shall
make an appointment for the unexpired term in the same manner as
the original appointment.
(6) The governor may remove a member of the board for
incompetency, dereliction of duty, malfeasance, misfeasance, or
nonfeasance in office, or any other good cause.
(7) The first meeting of the board shall be called by the
commissioner. At the first meeting, the board shall elect from
among its members a chairperson and other officers as it considers
necessary or appropriate. After the first meeting, the board shall
meet at least quarterly, or more frequently at the call of the
chairperson or if requested by 4 or more members.
(8) Four members of the board constitute a quorum for the
transaction of business at a meeting of the board. Four members
present and serving are required for official action of the board.
(9) The business that the board may perform shall be conducted
at a public meeting of the board held in compliance with the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275.
(10) A writing prepared, owned, used, in the possession of, or
retained by the board in the performance of an official function is
subject to the freedom of information act, 1976 PA 442, MCL 15.231
to 15.246.
(11) Members of the board shall serve without compensation.
However, members of the board may be reimbursed for their actual
and necessary expenses incurred in the performance of their
official duties as members of the board.
Sec. 3773. (1) The Michigan claims fund is created within the
state treasury. Money in the fund shall be used only as provided in
section 3775.
(2) The state treasurer may receive money or other assets from
any source for deposit into the Michigan claims fund. The state
treasurer shall direct the investment of the Michigan claims fund.
The state treasurer shall credit to the Michigan claims fund
interest and earnings from fund investments.
(3) Money in the Michigan claims fund at the close of the
fiscal year shall remain in the fund and shall not lapse to the
general fund.
(4) The commissioner shall be the administrator of the
Michigan claims fund for auditing purposes.
Sec. 3775. (1) Money shall be expended from the Michigan
claims fund to reimburse carriers for eligible claims. A carrier is
eligible to receive reimbursement from the Michigan claims fund for
90% of claims paid between $25,000.00 and $250,000.00 in a calendar
year have been paid by the carrier on behalf of a covered enrollee.
(2) Each carrier shall submit a request for reimbursement on a
form prescribed by the board from the Michigan claims fund by no
later than April 1 following the end of the calendar year for which
the reimbursement request is being made. Claims are eligible for
reimbursement only for the calendar year in which the claims are
paid. Once claims paid on behalf of a covered enrollee reach
$250,000.00 in a given calendar year, no further claims on behalf
of that covered enrollee in that calendar year are eligible for
reimbursement. Carriers may be required to submit claims data in
connection with the reimbursement request as the board considers
necessary to distribute money and oversee the operation of the
Michigan claims fund. The board may require that the data be
submitted on a per enrollee, aggregate basis or categorical basis.
(3) If the total amount requested for reimbursement by all
carriers for a calendar year exceeds funds available for
distribution for claims paid by all carriers during that same
calendar year, the board shall provide for the pro rata
distribution of the available funds. Each carrier shall be eligible
to receive only the proportionate amount of the available funds as
the individual carrier's total eligible claims paid bears to the
total eligible claims paid by all carriers.
(4) If funds available for distribution for claims paid by all
carriers during a calendar year exceed the total amount requested
for reimbursement by all carriers during that same calendar year,
any excess funds shall be carried forward, shall not revert to the
general fund, and shall be made available for distribution in the
next calendar year.
Sec. 3777. (1) As a condition of transacting business in this
state, each carrier engaged in writing a health benefit plan shall
pay an annual assessment into the Michigan claims fund as provided
in this section.
(2) The total assessment in a calendar year shall be the sum
of the estimate of total reimbursement to be made for claims paid
in the same calendar year plus the estimated cost of administering
the Michigan claims fund for the same calendar year. By not later
than April 1 of each year, the board shall determine the total
assessment and shall notify carriers of their assessment. A
carrier's assessment shall be determined by the board and shall be
apportioned on an equitable basis among all carriers of health
benefit plans in proportion to their respective shares of the total
premiums. By not later than 90 days after the assessment notice is
issued, each carrier shall pay the amount of its assessment to the
Michigan claims fund.
Sec. 3778. The premium rates established by a carrier for a
health benefit plan shall recognize the availability of
reimbursement from the Michigan claims fund.
Sec. 3779. The board shall keep an accurate account of all
Michigan claims fund receipts and expenditures and shall report by
October 1, 2010 and annually thereafter to the governor and to all
members of the house of representatives and senate standing
committees on appropriations, health, and insurance issues on the
amount of assessments collected and claims paid under sections 3775
and 3777.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 95th Legislature are
enacted into law:
(a) Senate Bill No. 581.
(b) Senate Bill No. 579.
(c) Senate Bill No. 582.