§ 58-67-50. Evidence of coverage and premiums for health care services. - North Carolina Statutes

§ 58‑67‑50. Evidence of coverage and premiums for health care services.

(a)        (1)        Everyenrollee residing in this State is entitled to evidence of coverage under ahealth care plan. If the enrollee obtains coverage under a health care planthrough an insurance policy or a contract issued by a hospital or medicalservice corporation, whether by option or otherwise, the insurer or thehospital or medical service corporation shall issue the evidence of coverage.Otherwise, the health maintenance organization shall issue the evidence ofcoverage.

(2)        No evidence ofcoverage, or amendment thereto, shall be issued or delivered to any person inthis State until a copy of the form of the evidence of coverage, or amendmentthereto, has been filed with and approved by the Commissioner.

(3)        An evidence ofcoverage shall contain:

a.         No provisions orstatements which are unjust, unfair, inequitable, misleading, deceptive, whichencourage misrepresentation, or which are untrue, misleading or deceptive asdefined in G.S. 58‑67‑65(a); and

b.         A clear and completestatement, if a contract, or a reasonably complete summary, if a certificateof:

1.         The health careservices and insurance or other benefits, if any, to which the enrollee isentitled under the health care plan;

2.         Any limitations onthe services, benefits, or kind of benefits, to be provided, including anydeductible or copayment feature;

3.         Where and in whatmanner information is available as to how services may be obtained;

4.         The total amount ofpayment for health care services and the indemnity or service benefits, if any,which the enrollee is obligated to pay with respect to individual contracts, oran indication whether the plan is contributory or noncontributory with respectto group certificates;

5.         A clear andunderstandable description of the health maintenance organization's method ofresolving enrollee complaints;

6.         A description of thereasons, if any, for which an enrollee's enrollment may be terminated forcause, which reasons may include behavior that seriously impairs the healthmaintenance organization's ability to provide services or an inability toestablish and maintain a satisfactory physician‑patient relationshipafter reasonable efforts to do so have been made.

Anysubsequent change may be evidenced in a separate document issued to theenrollee.

(4)        A copy of the formof the evidence of coverage to be used in this State, and any amendmentthereto, shall be subject to the filing and approval requirements of subsection(b) unless it is subject to the jurisdiction of the Commissioner under the lawsgoverning health insurance or hospital or medical service corporations in whichevent the filing and approval provisions of such laws shall apply. To theextent, however, that such provisions do not apply the requirements insubsection (c) shall be applicable.

(b)        (1)        Premiumapproval. – No schedule of premiums for coverage for health care services, orany amendment to the schedule, shall be used in conjunction with any healthcare plan until a copy of the schedule or amendment has been filed with andapproved by the Commissioner.

(2)        Individual coverage.– Premiums shall be established in accordance with actuarial principles forvarious categories of enrollees. Premiums applicable to an enrollee shall notbe individually determined based on the status of the enrollee's health.Premiums shall not be excessive, inadequate or unfairly discriminatory; andshall exhibit a reasonable relationship to the benefits provided by theevidence of coverage. The premiums or any premium revisions for nongroupenrollee coverage shall be guaranteed, as to every enrollee covered under thesame category of enrollee coverage, for a period of not less than 12 months. Asan alternative to giving this guarantee for nongroup enrollee coverage, thepremium or premium revisions may be made applicable to all similar categoriesof enrollee coverage at one time if the health maintenance organization choosesto apply for the premium revision with respect to the categories of coveragesno more frequently than once in any 12‑month period. The premium revisionshall be applicable to all categories of nongroup enrollee coverage of the sametype; provided that no premium revision may become effective for any categoryof enrollee coverage unless the HMO has given written notice of the premiumrevision to the enrollee 45 days before the effective date of the revision. Theenrollee must then pay the revised premium in order to continue the contract inforce. The Commissioner may adopt reasonable rules, after notice and hearing,to require the submittal of supporting data and such information as theCommissioner considers necessary to determine whether the rate revisions meetthe standards in this subdivision. In adopting the rules under this subsection,the Commissioner may require identification of the types of ratingmethodologies used by filers and may also address standards for data in HMOrate filings for initial filings, filings by recently licensed HMOs, and raterevision filings; data requirements for service area expansion requests; policyreserves used in rating; incurred loss ratio standards; and other recognizedactuarial principles of the NAIC, the American Academy of Actuaries, and theSociety of Actuaries.

(3)        Group coverage. – Employergroup premiums shall be established in accordance with actuarial principles forvarious categories of enrollees, provided that premiums applicable to anenrollee shall not be individually determined based on the status of theenrollee's health. Premiums shall not be excessive, inadequate, or unfairlydiscriminatory, and shall exhibit a reasonable relationship to the benefitsprovided by the evidence of coverage. The premiums or any revisions to thepremiums for employer group coverage shall be guaranteed for a period of notless than 12 months. No premium revision shall become effective for anycategory of group coverage unless the HMO has given written notice of thepremium revision to the master group contract holder upon receipt of thegroup's finalized benefits or 45 days before the effective date of therevision, whichever is earlier. The master group contract holder thereaftermust pay the revised premium in order to continue the contract in force. TheCommissioner may adopt reasonable rules, after notice and hearing, to requirethe submittal of supporting data and such information as the Commissionerconsiders necessary to determine whether the rate revisions meet the standardsin this subdivision.

(c)        The Commissionershall, within a reasonable period, approve any form if the requirements ofsubsection (a) of this section are met and any schedule of premiums if therequirements of subsection (b) of this section are met. It shall be unlawful toissue the form or to use the schedule of premiums until approved. If theCommissioner disapproves the filing, the Commissioner shall notify the filer.In the notice, the Commissioner shall specify the reasons for disapproval. Ahearing will be granted within 30 days after a request in writing by the personfiling. If the Commissioner does not approve or disapprove any form or scheduleof premiums within 90 days after the filing for forms and within 45 days afterthe filing for premiums, they shall be deemed to be approved.

(d)        The Commissionermay require the submission of whatever relevant information he deems necessaryin determining whether to approve or disapprove a filing made pursuant to thissection.

(e)        Every healthmaintenance organization shall provide at least minimum cost and utilizationinformation for group contracts of 100 or more subscribers on an annual basiswhen requested by the group. Such information shall be compiled in accordancewith the Data Collection Form developed by the Standardized HMO Date Form TaskForce as endorsed by the Washington Business Group on Health and the GroupHealth Association of America on November 19, 1986, and any subsequentamendments.  (1977,c. 580, s. 1; 1979, c. 876, s. 1; 1987, c. 631, s. 9; 1989, c. 485, s. 59;1991, c. 195, s. 1; c. 644, s. 13; c. 720, s. 36; 1995, c. 193, s. 59; 1997‑474,s. 3; 1997‑519, s. 1.3; 2001‑334, ss. 8.1, 17.4; 2001‑487,ss. 106(a), 106(b); 2008‑124, s. 5.3; 2009‑173, s. 1.)