Bill Text: MI SB0581 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Insurance; health care corporations; nongroup coverage and certain fees; require to comply with insurance code and provide for general amendments. Amends title & secs. 401e, 402b, 610, 612 & 613 of 1980 PA 350 (MCL 550.1401e et seq.) & adds secs. 102a, 220, 401k & 419c. TIE BAR WITH: SB 0579'09, SB 0580'09, SB 0582'09

Spectrum: Partisan Bill (Republican 2-0)

Status: (Introduced - Dead) 2009-05-14 - Referred To Committee On Health Policy [SB0581 Detail]

Download: Michigan-2009-SB0581-Introduced.html

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SENATE BILL No. 581

 

 

May 14, 2009, Introduced by Senators JANSEN and GEORGE and referred to the Committee on Health Policy.

 

 

 

     A bill to amend 1980 PA 350, entitled

 

"The nonprofit health care corporation reform act,"

 

by amending the title and sections 401e, 402b, 610, 612, and 613

 

(MCL 550.1401e, 550.1402b, 550.1610, 550.1612, and 550.1613), the

 

title as amended by 1994 PA 169, section 401e as added by 1996 PA

 

516, and section 402b as amended by 1999 PA 7, and by adding

 

sections 102a, 220, 401k, and 419c.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to provide for the incorporation of nonprofit health

 

care corporations; to provide their rights, powers, and immunities;

 

to prescribe the powers and duties of certain state officers

 

relative to the exercise of those rights, powers, and immunities;

 

to prescribe certain conditions for the transaction of business by

 

those corporations in this state; to define the relationship of

 

health care providers to nonprofit health care corporations and to

 

specify their rights, powers, and immunities with respect thereto;

 

to provide for a Michigan caring program; to provide for the

 

regulation and supervision of nonprofit health care corporations by

 

the commissioner of insurance the office of financial and insurance

 

regulation; to prescribe powers and duties of certain other state

 

officers with respect to the regulation and supervision of

 

nonprofit health care corporations; to provide for the imposition

 

of a regulatory fee and other fees; to regulate the merger or

 

consolidation of certain corporations; to prescribe an expeditious

 

and effective procedure for the maintenance and conduct of certain

 

administrative appeals relative to provider class plans; to provide

 

for certain administrative hearings relative to rates for health

 

care benefits; to provide for certain causes of action; to

 

prescribe penalties and to provide civil fines for violations of

 

this act; and to repeal certain acts and parts of acts.

 

     Sec. 102a. (1) By April 1, 2010, and annually thereafter, the

 

commissioner shall assess a fee on each health care corporation

 

that shall not exceed the amount of local tax and tax levied under

 

the Michigan business tax act, 2007 PA 36, MCL 208.1101 to

 

208.1601, that the health care corporation would have been required

 

to pay in the immediately preceding calendar year if the health

 

care corporation were subject to those taxes.

 

     (2) The fee assessed under subsection (1) shall be deposited

 

into the MI-Health fund created in the MI-Health act by no later

 

than 30 days after the assessment is issued under subsection (1).

 

     Sec. 220. A health care corporation is subject to chapter 37A

 

of the insurance code of 1956, 1956 PA 218, MCL 500.3751 to

 

500.3779.

 

     Sec. 401e. (1) Except as 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.

 

     (1) (2) Except as 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.

 

     (2) (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.

 

     Sec. 401k. The rates charged to nongroup, group conversion,

 

and medicare supplemental coverage may include rate differentials

 

based on body mass index and tobacco use and the subscriber's

 

participation in covered health screenings and covered wellness

 

programs.

 

     Sec. 402b. (1) For an individual covered under a nongroup

 

certificate or under a certificate not covered under subsection

 

(2), a health care corporation 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 certificate.

 

     (2) A health care corporation shall not exclude or limit

 

coverage for a preexisting condition for an individual covered

 

under a group certificate.

 

     (3) Notwithstanding subsection (1), a health care corporation

 

shall not issue a certificate to a person eligible for nongroup

 

coverage or eligible for a certificate not covered under subsection

 

(2) that excludes or limits coverage for a preexisting condition or

 

provides a waiting period if all of the following apply:

 

     (a) The person's most recent health coverage prior to applying

 

for coverage with the health care corporation was under a group

 

health plan.

 

     (b) The person was continuously covered prior to the

 

application for coverage with the health care corporation 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 person is no longer eligible for group coverage and is

 

not eligible for medicare or medicaid.

 

     (d) The person did not lose eligibility for coverage for

 

failure to pay any required contribution or for an act to defraud a

 

health care corporation, a health insurer, or a health maintenance

 

organization.

 

     (e) If the person 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, 100

 

Stat. 82, he or she has elected and exhausted that coverage.

 

     (4) As used in this section, "group" means a group of 2 or

 

more subscribers.

 

     Sec. 419c. (1) If the cover Michigan board determines that

 

section 401b, 401f, 401g, 414a, 415, 416, 416a, 416b, 416c, 416d,

 

or 417 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. 610. (1) Except as provided under section 608(4) or (5),

 

a filing of information and materials relative to a proposed rate

 

shall be made not less than 120 60 days before the proposed

 

effective date of the proposed rate. A filing shall not be

 

considered to have been received until there has been substantial

 

and material compliance with the requirements prescribed in

 

subsections (6) and (8) this section.

 

     (2) Within 30 15 days after a filing is made of information

 

and materials relative to a proposed rate, the commissioner shall

 

do either of the following:

 

     (a) Give written notice to the corporation, and to each person

 

described under section 612(1), that the filing is in material and

 

substantial compliance with subsections (6) and (8) this section

 

and that the filing is complete. The commissioner shall then

 

proceed to approve, approve with modifications, or disapprove the

 

rate filing 60 days after receipt of the filing, based upon whether

 

the filing meets the requirements of this act. However, if a

 

hearing has been requested under section 613, the commissioner

 

shall not approve, approve with modifications, or disapprove a

 

filing until the hearing has been completed and an order issued.

 

     (b) Give written notice to the corporation that the

 

corporation has not yet complied with subsections (6) and (8) this

 

section. The notice shall state specifically in what respects the

 

filing fails to meet the requirements of subsections (6) and (8)

 

this section.

 

     (3) Within 10 8 days after the filing of notice pursuant to

 

subsection (2)(b), the corporation shall submit to the commissioner

 

such additional information and materials, as requested by the

 

commissioner. Within 10 8 days after receipt of the additional

 

information and materials, the commissioner shall determine whether

 

the filing is in material and substantial compliance with

 

subsections (6) and (8) this section. If the commissioner

 

determines that the filing does not yet materially and

 

substantially meet the requirements of subsections (6) and (8) this

 

section, the commissioner shall give notice to the corporation

 

pursuant to subsection (2)(b) or use visitation of the

 

corporation's facilities and examination of the corporation's

 

records to obtain the necessary information described in the notice

 

issued pursuant to subsection (2)(b). The commissioner shall use

 

either procedure previously mentioned, or a combination of both

 

procedures, in order to obtain the necessary information as

 

expeditiously as possible. The per diem, traveling, reproduction,

 

and other necessary expenses in connection with visitation and

 

examination shall be paid by the corporation, and shall be credited

 

to the general fund of the state.

 

     (4) If a filing is approved, approved with modifications, or

 

disapproved under subsection (2)(a), the commissioner shall issue a

 

written order of the approval, approval with modifications, or

 

disapproval. If the filing was approved with modifications or

 

disapproved, the order shall state specifically in what respects

 

the filing fails to meet the requirements of this act and, if

 

applicable, what modifications are required for approval under this

 

act. If the filing was approved with modifications, the order shall

 

state that the filing shall take effect after the modifications are

 

made and approved by the commissioner. If the filing was

 

disapproved, the order shall state that the filing shall not take

 

effect.

 

     (5) The inability to approve 1 or more rating classes of

 

business within a line of business because of a requirement to

 

submit further data or because a request for a hearing under

 

section 613 has been granted shall not delay the approval of rates

 

by the commissioner which could otherwise be approved or the

 

implementation of rates already approved, unless the approval or

 

implementation would affect the consideration of the unapproved

 

classes of business.

 

     (6) Information furnished under subsection (1) in support of a

 

nongroup rate filing shall include the following:

 

     (a) Recent claim experience on the benefits or comparable

 

benefits for which the rate filing applies.

 

     (b) Actual prior trend experience.

 

     (c) Actual prior administrative expenses.

 

     (d) Projected trend factors.

 

     (e) Projected administrative expenses.

 

     (f) Contributions for risk and contingency reserve factors.

 

     (g) Actual health care corporation contingency reserve

 

position.

 

     (h) Projected health care corporation contingency reserve

 

position.

 

     (i) Other information which the corporation considers

 

pertinent to evaluating the risks to be rated, or relevant to the

 

determination to be made under this section.

 

     (j) Other information which the commissioner considers

 

pertinent to evaluating the risks to be rated, or relevant to the

 

determination to be made under this section.

 

     (7) A copy of the filing, and all supporting information,

 

except for the information which may not be disclosed under section

 

604, shall be open to public inspection as of the date filed with

 

the commissioner.

 

     (8) The commissioner shall make available forms and

 

instructions for filing for proposed rates under sections section

 

608(1) and 608(2) (2). The forms with instructions shall be

 

available not less than 180 90 days before the proposed effective

 

date of the filing.

 

     Sec. 612. (1) Upon receipt of a rate filing under section 610,

 

the commissioner immediately shall notify each person who has

 

requested in writing notice of those filings within the previous 2

 

years, specifying the nature and extent of the proposed rate

 

revision and identifying the location, time, and place where the

 

copy of the rate filing described in section 610(7) shall be open

 

to public inspection and copying. The notice shall also state that

 

if the person has standing, the person shall have, upon making a

 

written request for a hearing within 60 30 days after receiving

 

notice of the rate filing, an opportunity for an evidentiary

 

hearing under section 613 to determine whether the proposed rates

 

meet the requirements of this act. The request shall identify the

 

issues which the requesting party asserts are involved, what

 

portion of the rate filing is requested to be heard, and how the

 

party has standing. The corporation shall place advertisements

 

giving notice, containing the information specified above, in at

 

least 1 newspaper which serves each geographic area in which

 

significant numbers of subscribers reside.

 

     (2) The commissioner may charge a fee for providing, pursuant

 

to subsection (1), a copy of the rate filing described in section

 

610(7). The commissioner may charge a fee for providing a copy of

 

the entire filing to a person whose request for a hearing has been

 

granted by the commissioner pursuant to section 613. The fee shall

 

be limited to actual mailing costs and to the actual incremental

 

cost of duplication, including labor and the cost of deletion and

 

separation of information as provided in section 14 of Act No. 442

 

of the Public Acts of 1976, being section 15.244 of the Michigan

 

Compiled Laws the freedom of information act, 1976 PA 442, MCL

 

15.244. Copies of the filing may be provided free of charge or at a

 

reduced charge if the commissioner determines that a waiver or

 

reduction of the fee is in the public interest because the

 

furnishing of a copy of the filing will primarily benefit the

 

general public. In calculating the costs under this subsection, the

 

commissioner shall not attribute more than the hourly wage of the

 

lowest paid, full-time clerical employee of the insurance bureau

 

office of financial and insurance regulation to the cost of labor

 

incurred in duplication and mailing and to the cost of separation

 

and deletion. The commissioner shall use the most economical means

 

available to provide copies of a rate filing.

 

     Sec. 613. (1) If the request for a hearing under this section

 

is with regard to a rate filing not yet acted upon under section

 

610(2)(a), no such action shall be taken by the commissioner until

 

after the hearing has been completed. However, the commissioner

 

shall proceed to act upon those portions of a rate filing upon

 

which no hearing has been requested. Within 15 8 days after receipt

 

of a request for a hearing, the commissioner shall determine if the

 

person has standing. If the commissioner determines that the person

 

has standing, the person may have access to the entire filing

 

subject to the same confidentiality requirements as the

 

commissioner under section 604, and shall be subject to the penalty

 

provision of section 604(5). Upon determining that the person has

 

standing, the commissioner shall immediately appoint an independent

 

hearing officer before whom the hearing shall be held. In

 

appointing an independent hearing officer, the commissioner shall

 

select a person qualified to conduct hearings, who has experience

 

or education in the area of health care corporation or insurance

 

rate determination and finance, and who is not otherwise associated

 

financially with a health care corporation or a health care

 

provider. The person selected shall not be currently or actively

 

employed by this state. For purposes of this subsection, an

 

employee of an educational institution shall not be considered to

 

be employed by this state. For purposes of this section, a person

 

has "standing" if any of the following circumstances exist:

 

     (a) The person is, or there are reasonable grounds to believe

 

that the person could be, aggrieved by the proposed rate.

 

     (b) The person is acting on behalf of 1 or more named persons

 

described in subdivision (a).

 

     (c) The person is the commissioner, the attorney general, or

 

the health care corporation.

 

     (2) Not more than 30 15 days after receipt of a request for a

 

hearing, and upon not less than 15 8 days' notice to all parties,

 

the hearing shall be commenced. Each party to the hearing shall be

 

given a reasonable opportunity for discovery before and throughout

 

the course of the hearing. However, the hearing officer may

 

terminate discovery at any time, for good cause shown. The hearing

 

officer shall conduct the hearing pursuant to the administrative

 

procedures act. The hearing shall be conducted in an expeditious

 

manner, and except for good cause shown, the hearing officer shall

 

render a proposal for decision not later than 30 days after the

 

start of the hearing. At the hearing, the burden of proving

 

compliance with this act shall be upon the health care corporation.

 

     (3) In rendering a proposal for a decision, the hearing

 

officer shall consider the factors prescribed in section 609.

 

     (4) Within 30 8 days after receipt of the hearing officer's

 

proposal for decision, the commissioner shall by order render a

 

decision which shall include a statement of findings.

 

     (5) The commissioner shall withdraw an order of approval or

 

approval with modifications if the commissioner finds that the

 

filing no longer meets the requirements of this act.

 

     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. 580.                                   

 

            

 

     (b) Senate Bill No. 579.                                   

 

            

 

     (c) Senate Bill No. 582.