Bill Text: MI HB4139 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Insurance; health; health care beneficiary eligibility audit; require for certain public employers. Amends 1984 PA 431 (MCL 18.1101 - 18.1594) by adding sec. 280.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-01-27 - Printed Bill Filed 01/27/2011 [HB4139 Detail]

Download: Michigan-2011-HB4139-Introduced.html

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HOUSE BILL No. 4139

 

January 26, 2011, Introduced by Rep. Melton and referred to the Committee on Government Operations.

 

     A bill to amend 1984 PA 431, entitled

 

"The management and budget act,"

 

(MCL 18.1101 to 18.1594) by adding section 280.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 280. (1) By not later than 60 days after the effective

 

date of the amendatory act that added this section, the department

 

shall contract to have conducted a beneficiary eligibility audit of

 

the health benefits of covered public employees. The audit shall

 

meet all of the following:

 

     (a) Provide an amnesty period in which public employees are

 

informed of coverage eligibility rules and provided a period of

 

time to voluntarily remove any ineligible beneficiaries from the

 

health benefits plan.

 

     (b) Provide a verification period that gives public employees

 

sufficient time to locate information necessary to verify

 

eligibility.

 

     (c) Provide a process that permits public employees to appeal

 

an ineligibility or nonrespondent decision.

 

     (d) Be completed by not later than 180 days after the

 

effective date of the amendatory act that added this section.

 

     (e) Be conducted by a company that agrees to the payment

 

provisions as provided in this section.

 

     (f) Be conducted in compliance with the health insurance

 

portability and accountability act of 1996, Public Law 104-191.

 

     (2) The state shall not pay for the beneficiary eligibility

 

audit unless a break-even point is achieved. A break-even point

 

occurs when the total of all individual realized savings is equal

 

to the audit company's actual cost of conducting the audit.

 

     (3) If the total of all individual realized savings exceeds

 

the audit company's actual cost of conducting the audit, the audit

 

company shall be paid the actual cost under subsection (2) and a

 

percentage of the net realized savings as agreed to by the

 

department and the audit company.

 

     (4) If a public employer has individual realized savings, the

 

state shall charge to the public employer the public employer's pro

 

rata share of amounts paid under subsections (2) and (3).

 

     (5) A public employer described in subsection (6)(g)(ii) who

 

has conducted or has had conducted a beneficiary eligibility audit

 

in the 36-month period before the effective date of the amendatory

 

act that added this section is not required to participate in a

 

beneficiary eligibility audit under this section.

 

     (6) As used in this section:

 

     (a) "Actual cost" means the actual cost incurred by the audit

 

company to complete the audit under this section, as independently

 

verified.

 

     (b) "Carrier" means a person that provides health benefits,

 

coverage, or insurance to an individual under a health benefit plan

 

in this state. For the purposes of this section, carrier includes a

 

health insurance company or health maintenance organization

 

authorized to do business in this state, a health care corporation

 

operating pursuant to the nonprofit health care corporation reform

 

act, 1980 PA 350, MCL 550.1101 to 550.1704, or any other person

 

providing a plan of health benefits, coverage, or insurance subject

 

to state insurance regulation.

 

     (c) "Health benefits" means medical, surgical, or hospital

 

care benefits.

 

     (d) "Individual realized savings" means the realized savings

 

for each public employer participating in the audit under this

 

section.

 

     (e) "Net realized savings" means the sum of all individual

 

realized savings less actual cost.

 

     (f) "Public employee" means an employee, officer, or elected

 

official of a public employer, or an employee retired from

 

employment with a public employer, who is receiving health benefits

 

coverage funded in whole or in part by a public employer.

 

     (g) "Public employer" means the following:

 

     (i) The state.

 

     (ii) Any of the following that is not exempt under subsection

 

(5):

 

     (A) A city, village, township, county, or other political

 

subdivision of this state.

 

     (B) An intergovernmental, metropolitan, or local department,

 

agency, or authority or other local political subdivision.

 

     (C) A school district, a public school academy, or an

 

intermediate school district, as those terms are defined in the

 

revised school code, 1976 PA 451, MCL 380.1 to 380.1852.

 

     (D) A community college or junior college described in section

 

7 of article VIII of the state constitution of 1963.

 

     (E) A public university described in section 4, 5, or 6 of

 

article VIII of the state constitution of 1963.

 

     (F) A board or other administrator of a public employee or

 

officer retirement system.

 

     (h) "Realized savings" means the savings that occur when an

 

ineligible beneficiary has been identified and removed from the

 

health benefit plan provided by the public employer. For a carrier-

 

issued health benefit plan provided by the public employer,

 

realized savings occur when the premium is adjusted by the carrier

 

to reflect lower health benefit plan enrollment. For a self-funded

 

health benefit plan provided by the public employer, realized

 

savings occur when a beneficiary is removed from the plan.