September 19, 2012, Introduced by Senators HUNE and SMITH and referred to the Committee on Insurance.
A bill to amend 1980 PA 350, entitled
"The nonprofit health care corporation reform act,"
by amending sections 218 and 401e (MCL 550.1218 and 550.1401e),
section 218 as added by 2002 PA 559 and section 401e as added by
1996 PA 516, and by adding sections 220, 401l, 401m, and 620.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 218. A health care corporation shall not do any of the
following:
(a) Take any action to change its nonprofit status.
(b)
Dissolve, Except as
otherwise provided in section 220,
dissolve, merge, consolidate, mutualize, or take any other action
that results in a change in direct or indirect control of the
health care corporation or sell, transfer, lease, exchange, option,
or convey assets that results in a change in direct or indirect
control of the health care corporation.
Sec. 220. (1) Notwithstanding any provision of this act to the
contrary, a health care corporation may establish, own, operate,
and merge with a nonprofit mutual disability insurer formed under
chapter 58 of the insurance code of 1956, 1956 PA 218, MCL 500.5800
to 500.5840. The surviving entity of a merger described in this
subsection is the nonprofit mutual disability insurer. The
nonprofit mutual disability insurer formed through a merger
described in this subsection is exempt from the application of
sections 1311 to 1319 of the insurance code of 1956, 1956 PA 218,
MCL 500.1311 to 500.1319.
(2) The merger of a health care corporation with a nonprofit
mutual disability insurer is effective upon adoption of a plan of
merger by the majority of the boards of directors of both the
health care corporation and the nonprofit mutual disability
insurer.
(3) Notwithstanding any other provision of this act to the
contrary, the directors of a health care corporation may serve as
incorporators of the corporate body of, directors of, or officers
of the nonprofit mutual disability insurer formed through a merger
described in subsection (1).
(4) A merger described in subsection (1) is the dissolution of
the health care corporation, and the surviving nonprofit mutual
disability insurer assumes the performance of all contracts and
policies of the merged health care corporation that exist on the
date of the merger. However, the officers of a health care
corporation may perform any act or acts necessary to close the
affairs of the merged health care corporation after the date of the
merger.
Sec. 401e. (1) Except as otherwise provided in this section, a
health care corporation that has issued a nongroup certificate
shall renew or continue in force the certificate at the option of
the individual.
(2) Except as otherwise provided in this section, a health
care corporation that has issued a group certificate shall renew or
continue in force the 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 health care corporation no longer offers that particular type
of coverage in the market, or if the individual or group moves
outside the service area.
(4) A health care corporation shall not discontinue offering a
particular plan or product in the nongroup or group market unless
the health care corporation does all of the following:
(a) Provides notice to the commissioner and to each covered
individual provided coverage under the plan or product of the
discontinuation at least 90 days before the date of the
discontinuation.
(b) Offers to each covered individual provided coverage under
the plan or product the option to purchase any other plan or
product currently being offered in the nongroup market by that
health care corporation without excluding or limiting coverage for
a preexisting condition or providing a waiting period.
(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 or products.
(5) A health care corporation shall not discontinue offering
all coverage in the nongroup or group market unless the health care
corporation does all of the following:
(a) Provides notice to the commissioner and to each covered
individual of the discontinuation at least 180 days before the date
of the expiration of coverage.
(b) Discontinues all health benefit plans issued in the
nongroup or group market from which the health care corporation
withdrew and does not renew coverage under those plans.
(6) If a health care corporation discontinues coverage under
subsection (5), the health care corporation shall not provide for
the issuance of any health benefit plans in the nongroup or group
market from which the health care corporation withdrew during the
5-year period beginning on the date of the discontinuation of the
last plan not renewed under that subsection.
Sec. 401l. Notwithstanding any provision of this act to the
contrary, a health care corporation may, in determining premiums
offered in the nongroup market, consider age, geography, smoking,
family composition, and any other factors permitted under federal
law for a certificate delivered, issued for delivery, or renewed in
this state on, or after, January 1, 2014.
Sec. 401m. Until January 1, 2014, a health care corporation
established, maintained, or operating in this state shall offer
health care benefits to all residents of this state regardless of
health status.
Sec. 620. (1) Notwithstanding any provision of this act to the
contrary, a certificate delivered, issued for delivery, or renewed
in this state on or after January 1, 2014 by a health care
corporation is subject to the policy and certificate issuance and
rate filing requirements of the insurance code of 1956, 1956 PA
218, MCL 500.100 to 500.8302.
(2) Beginning January 1, 2014, a health care corporation may
establish open enrollment periods for certificates offered,
delivered, issued for delivery, or renewed in this state by the
health care corporation.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 1293
of the 96th Legislature is enacted into law.