Section 760 IAC 1-73-7 - Health benefit planAuthority: IC 27-16-4-7; IC 27-16-5-4; IC 27-16-5-6; IC 27-16-8-4
Affected: IC 27-1-3.1; IC 27-1-25; IC 27-4-1; IC 27-16
Sec. 7.
(a) If a PEO offers to its employees a health benefit plan that is not fully insured, the PEO must comply with the following: (1) The health benefit plan shall have stop loss coverage with an insurer authorized to do business in Indiana. The aggregate retention by the health benefit plan may not exceed one hundred twenty-five percent (125%) of expected claims. The health benefit plan may not use the identity of the stop loss insurer in its marketing information.(2) Funds held by the PEO for the health benefit plan must be held in a segregated trust account and may be used only for claims and administrative expenses of the health benefit plan. (A) The segregated trust account shall: (i) hold reserves consistent with the actuarial opinion; and(ii) have a minimum balance of one hundred thousand dollars ($100,000).(B) The segregated trust account shall hold its funds in the form of:(ii) irrevocable letter of credit; or(iii) U.S. government investments.(3) The health benefit plan shall place funds into the segregated trust account sufficient to fund one hundred percent (100%) of the aggregate retention plus all other costs of the health benefit plan.(4) The health benefit plan shall:(A) be operated in accordance with sound actuarial principles; and(B) have an annual actuarial opinion from a qualified actuary.(5) The PEO shall have a written plan acceptable to the department for handling claims. The plan shall include the services of an administrator licensed under IC 27-1-25.(6) No person charged with responsibility of handling funds may have been convicted at any time of a crime involving moral turpitude or dishonesty unless the commissioner specifically, in writing, permits the person to be involved with the health benefit plan.(7) The health benefit plan may only provide health benefits to employees and their dependents. The health benefit plan may not discriminate between persons based upon health status in eligibility or terms of coverage.(8) The PEO shall have a written plan acceptable to the commissioner for the payment of claims in the event of a voluntary dissolution or insolvency.(9) The PEO and its health benefit plan must comply with the Health Insurance Portability and Accountability Act of 1996, as well as any other applicable federal and state laws. The health benefit plan is subject to IC 27-4-1 regarding unfair claims settlement practices and penalties for violations.(b) The PEO and its health benefit plan if the health benefit plan is not fully insured are subject to examination by the department every three (3) years or as may be determined necessary by the commissioner. The: (1) department shall have the powers granted; and(2) examination shall be governed; by the provisions of IC 27-1-3.1. All expenses of an examination shall be borne by the PEO. (c) Every application, summary plan description, and evidence of coverage form issued by a health benefit plan that is not fully insured shall contain the following notice on the front page in not less than 12-point type: "Your coverage is through a self-insured PEO. It is not fully insured. Your coverage is subject to the federal Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 10001 et seq.). It may not be subject to all of the insurance laws and regulations of Indiana. State insurance guaranty funds are not available for self-insured plans.". Department of Insurance; 760 IAC 1-73-7; filed May 24, 2007, 4:15 p.m.: 20070620-IR-760060069FRA; readopted filed November 26, 2013, 3:43 p.m.: 20131225-IR-760130479RFAReadopted filed 11/19/2019, 9:18 a.m.: 20191218-IR-760190497RFA