1.
(a)There is established a nonprofit legal
entity to be referred to as the Indiana comprehensive health insurance
association, which must assure that health insurance is made available
throughout the year to each eligible Indiana resident applying to the
association for coverage. All carriers, health maintenance
organizations, limited service health maintenance organizations, and
self-insurers providing health insurance or health care services in
Indiana must be members of the association. The association shall
operate under a plan of operation established and approved under
subsection (c) and shall exercise its powers through a board of directors
established under this section.
(b)The board of directors of the association consists of nine (9)
members whose principal residence is in In
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1. (a) There is established a nonprofit legal
entity to be referred to as the Indiana comprehensive health insurance
association, which must assure that health insurance is made available
throughout the year to each eligible Indiana resident applying to the
association for coverage. All carriers, health maintenance
organizations, limited service health maintenance organizations, and
self-insurers providing health insurance or health care services in
Indiana must be members of the association. The association shall
operate under a plan of operation established and approved under
subsection (c) and shall exercise its powers through a board of directors
established under this section.
(b) The board of directors of the association consists of nine (9)
members whose principal residence is in Indiana selected as follows:
(1) Four (4) members to be appointed by the commissioner from
the members of the association, one (1) of which must be a
representative of a health maintenance organization.
(2) Two (2) members to be appointed by the commissioner shall
be consumers representing policyholders.
(3) Two (2) members shall be the state budget director or
designee and the commissioner of the department of insurance or
designee.
(4) One (1) member to be appointed by the commissioner must be
a representative of health care providers.
The commissioner shall appoint the chairman of the board, and the
board shall elect a secretary from its membership. The term of office
of each appointed member is three (3) years, subject to eligibility for
reappointment. Members of the board who are not state employees may
be reimbursed from the association's funds for expenses incurred in
attending meetings. The board shall meet at least semiannually, with
the first meeting to be held not later than May 15 of each year.
(c) The association shall submit to the commissioner a plan of
operation for the association and any amendments to the plan necessary
or suitable to assure the fair, reasonable, and equitable administration
of the association. The plan of operation becomes effective upon
approval in writing by the commissioner consistent with the date on
which the coverage under this chapter must be made available. The
commissioner shall, after notice and hearing, approve the plan of
operation if the plan is determined to be suitable to assure the fair,
reasonable, and equitable administration of the association and
provides for the sharing of association losses on an equitable,
proportionate basis among the member carriers, health maintenance
organizations, limited service health maintenance organizations, and
self-insurers. If the association fails to submit a suitable plan of
operation within one hundred eighty (180) days after the appointment
of the board of directors, or at any time thereafter the association fails
to submit suitable amendments to the plan, the commissioner shall
adopt rules under IC 4-22-2 necessary or advisable to implement this
section. These rules are effective until modified by the commissioner
or superseded by a plan submitted by the association and approved by
the commissioner. The plan of operation must:
(1) establish procedures for the handling and accounting of assets
and money of the association;
(2) establish the amount and method of reimbursing members of
the board;
(3) establish regular times and places for meetings of the board of
directors;
(4) establish procedures for records to be kept of all financial
transactions and for the annual fiscal reporting to the
commissioner;
(5) establish procedures whereby selections for the board of
directors will be made and submitted to the commissioner for
approval;
(6) contain additional provisions necessary or proper for the
execution of the powers and duties of the association; and
(7) establish procedures for the periodic advertising of the general
availability of the health insurance coverages from the
association.
(d) The plan of operation may provide that any of the powers and
duties of the association be delegated to a person who will perform
functions similar to those of this association. A delegation under this
section takes effect only with the approval of both the board of
directors and the commissioner. The commissioner may not approve a
delegation unless the protections afforded to the insured are
substantially equivalent to or greater than those provided under this
chapter.
(e) The association has the general powers and authority enumerated
by this subsection in accordance with the plan of operation approved
by the commissioner under subsection (c). The association has the
general powers and authority granted under the laws of Indiana to
carriers licensed to transact the kinds of health care services or health
insurance described in section 1 of this chapter and also has the
specific authority to do the following:
(1) Enter into contracts as are necessary or proper to carry out this
chapter, subject to the approval of the commissioner.
(2) Subject to section 2.6 of this chapter, sue or be sued, including
taking any legal actions necessary or proper for recovery of any
assessments for, on behalf of, or against participating carriers.
(3) Take legal action necessary to avoid the payment of improper
claims against the association or the coverage provided by or
through the association.
(4) Establish a medical review committee to determine the
reasonably appropriate level and extent of health care services in
each instance.
(5) Establish appropriate rates, scales of rates, rate classifications
and rating adjustments, such rates not to be unreasonable in
relation to the coverage provided and the reasonable operational
expenses of the association.
(6) Pool risks among members.
(7) Issue policies of insurance on an indemnity or provision of
service basis providing the coverage required by this chapter.
(8) Administer separate pools, separate accounts, or other plans
or arrangements considered appropriate for separate members or
groups of members.
(9) Operate and administer any combination of plans, pools, or
other mechanisms considered appropriate to best accomplish the
fair and equitable operation of the association.
(10) Appoint from among members appropriate legal, actuarial,
and other committees as necessary to provide technical assistance
in the operation of the association, policy and other contract
design, and any other function within the authority of the
association.
(11) Hire an independent consultant.
(12) Develop a method of advising applicants of the availability
of other coverages outside the association.
(13) Provide for the use of managed care plans for insureds,
including the use of:
(A) health maintenance organizations; and
(B) preferred provider plans.
(14) Solicit bids directly from providers for coverage under this
chapter.
(15) Subject to section 3 of this chapter, negotiate reimbursement
rates and enter into contracts with individual health care providers
and health care provider groups.
(f) Rates for coverages issued by the association may not be
unreasonable in relation to the benefits provided, the risk experience,
and the reasonable expenses of providing the coverage. Separate scales
of premium rates based on age apply for individual risks. Premium
rates must take into consideration the extra morbidity and
administration expenses, if any, for risks insured in the association. The
rates for a given classification must be equal to one hundred fifty
percent (150%) of the average premium rate for that class charged by
the five (5) carriers with the largest premium volume in the state during
the preceding calendar year. In determining the average rate of the five
(5) largest carriers, the rates charged by the carriers shall be actuarially
adjusted to determine the rate that would have been charged for
benefits substantially identical to those issued by the association. All
rates adopted by the association must be submitted to the commissioner
for approval.
(g) Following the close of the association's fiscal year, the
association shall determine the net premiums, the expenses of
administration, and the incurred losses for the year. Twenty-five
percent (25%) of any net loss shall be assessed by the association to all
members in proportion to their respective shares of total health
insurance premiums as reported to the department of insurance,
excluding premiums for Medicaid contracts with the state of Indiana,
received in Indiana during the calendar year (or with paid losses in the
year) coinciding with or ending during the fiscal year of the
association. Seventy-five percent (75%) of any net loss shall be paid by
the state. In sharing losses, the association may abate or defer in any
part the assessment of a member, if, in the opinion of the board,
payment of the assessment would endanger the ability of the member
to fulfill its contractual obligations. The association may also provide
for interim assessments against members of the association if necessary
to assure the financial capability of the association to meet the incurred
or estimated claims expenses or operating expenses of the association
until the association's next fiscal year is completed. Net gains, if any,
must be held at interest to offset future losses or allocated to reduce
future premiums. Assessments must be determined by the board
members specified in subsection (b)(1), subject to final approval by the
commissioner.
(h) The association shall conduct periodic audits to assure the
general accuracy of the financial data submitted to the association, and
the association shall have an annual audit of its operations by an
independent certified public accountant.
(i) The association is subject to examination by the department of
insurance under IC 27-1-3.1. The board of directors shall submit, not
later than March 30 of each year, a financial report for the preceding
calendar year in a form approved by the commissioner.
(j) All policy forms issued by the association must conform in
substance to prototype forms developed by the association, must in all
other respects conform to the requirements of this chapter, and must be
filed with and approved by the commissioner before their use.
(k) The association may not issue an association policy to any
individual who, on the effective date of the coverage applied for, does
not meet the eligibility requirements of section 5.1 of this chapter.
(l) The association and the premium collected by the association
shall be exempt from the premium tax, the adjusted gross income tax,
or any combination of these upon revenues or income that may be
imposed by the state.
(m) Members who, during any calendar year, have paid one (1) or
more assessments levied under this chapter may include in the rates for
premiums charged for insurance policies to which this chapter applies
amounts sufficient to recoup a sum equal to the amounts paid to the
association by the member less any amounts returned to the member
insurer by the association, and the rates shall not be deemed excessive
by virtue of including an amount reasonably calculated to recoup
assessments paid by the member.
(n) The association shall provide for the option of monthly
collection of premiums.
(o) The association shall periodically certify to the budget agency
the amount necessary to pay seventy-five percent (75%) of any net loss
as specified in subsection (g).