Section 500.3563 - Insolvency; allocation of group coverage to health maintenance organizations and insurers participating in enrollment process; allocation of group coverage to health maintenance org - Michigan Statutes

THE INSURANCE CODE OF 1956 (EXCERPT)
Act 218 of 1956

500.3563 Insolvency; allocation of group coverage to health maintenance organizations and insurers participating in enrollment process; allocation of group coverage to health maintenance organizations or insurers within service area; nongroup coverage; reassignment of enrollees of insolvent organization contracting with state funded health care program.

Sec. 3563.

(1) If a health maintenance organization becomes insolvent, upon the commissioner's order all other health maintenance organizations and health insurers that participated in the enrollment process with the insolvent health maintenance organization at a group's last regular enrollment period shall offer the insolvent health maintenance organization's and health insurer's group enrollees a 30-day enrollment period beginning on the date of the commissioner's order. Each health maintenance organization and health insurer shall offer the insolvent health maintenance organization's enrollees the same coverages and rates that it had offered to the enrollees of the group at its last regular enrollment period.

(2) If no other health maintenance organization or health insurer had been offered to some groups enrolled in the insolvent health maintenance organization, or if the commissioner determines that the other health maintenance organizations or health insurers lack sufficient health care delivery resources to assure that health care services will be available and accessible to all of the group enrollees of the insolvent health maintenance organization, then the commissioner shall allocate equitably the insolvent health maintenance organization's group contracts for these groups among all health maintenance organizations that operate within a portion of the insolvent health maintenance organization's service area, taking into consideration the health care delivery resources of each health maintenance organization. Each health maintenance organization to which a group or groups are so allocated shall offer the group or groups the health maintenance organization's existing coverage that is most similar to each group's coverage with the insolvent health maintenance organization at rates determined in accordance with the successor health maintenance organization's existing rating methodology.

(3) The commissioner shall allocate equitably the insolvent health maintenance organization's nongroup enrollees who are unable to obtain other coverage among all health maintenance organizations that operate within a portion of the insolvent health maintenance organization's service area, taking into consideration the health care delivery resources of each health maintenance organization. Each health maintenance organization to which nongroup enrollees are allocated shall offer the nongroup enrollees the health maintenance organization's existing coverage without a preexisting condition limitation for individual or conversion coverage as determined by the enrollee's type of coverage in the insolvent health maintenance organization at rates determined in accordance with the successor health maintenance organization's existing rating methodology. Successor health maintenance organizations that do not offer direct nongroup enrollment may aggregate all of the allocated nongroup enrollees into 1 group for rating and coverage purposes.

(4) If a health maintenance organization that contracts with a state funded health care program becomes insolvent, the commissioner shall inform the state agency responsible for the program of the insolvency. Notwithstanding any other provision of this section, enrollees of an insolvent health maintenance organization covered by a state funded health care program may be reassigned in accordance with state and federal statutes governing the particular program.

History: Add. 2000, Act 252, Imd. Eff. June 29, 2000
Popular Name: Act 218
Popular Name: HMO