Bill Text: MI SB0580 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Insurance; health; individual health benefit plans; regulate. Amends secs. 2213b, 3406f, 3501, 3503, 3519 & 3539 of 1956 PA 218 (MCL 500.2213b et seq.) & adds sec. 3406s & ch. 37A. TIE BAR WITH: SB 0579'09, SB 0581'09, SB 0582'09

Spectrum: Moderate Partisan Bill (Republican 9-1)

Status: (Introduced - Dead) 2009-05-14 - Referred To Committee On Health Policy [SB0580 Detail]

Download: Michigan-2009-SB0580-Introduced.html

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SENATE BILL No. 580

 

 

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.