N.J. Admin. Code § 11:24-14.5

Current through Register Vol. 57, No. 1, January 6, 2025

Section 11:24-14.5 - POS under a reinsurance-type contract arrangement

(a) The reinsurance-type contract shall cover the entire cost of the out-of-network covered services, and shall not provide for any deductible, coinsurance, copayment, or other type of mechanism by which any portion of the out-of-network covered services become self-funded by the HMO.

1. The HMO may elect not to include benefits for emergency and out-of-area care under the reinsurance-type contract.

2. If the HMO elects to include benefits for emergency and out-of-area care under the reinsurance-type contract, the HMO and the carrier or insurer may specify a deductible or other mechanism by which the HMO shall self-fund some portion of the emergency and/or out-of-area care benefits only.

(b) The reinsurance-type contract shall include a provision by which the carrier or insurer agrees to indemnify members directly, subject to the terms of the HMO's contract with its subscribers and contractholders, if the HMO is placed into conservation, rehabilitation or liquidation.

(c) The reinsurance-type contract shall be specific to the HMO's POS contract(s); stop loss or excess risk insurance, insolvency insurance, general letters of guaranty by parent or affiliate corporations and similar such forms of insurance and guarantees shall not be considered acceptable reinsurance-type contracts in compliance with this subchapter.

(d) An HMO shall not report the reinsurance-type contract as an offset to its reserves for out-of-network covered services unless the carrier or insurer from whom the reinsurance-type contract is purchased and the transaction meet the requirements of N.J.A.C. 11:2-28, Credit for reinsurance.

(e) The informational rate filing shall specify the premium and premium rating methodology for all services covered under the POS contract, including the cost to the HMO of purchasing the reinsurance-type contract to provide indemnity benefits for the out-of-network covered services.

(f) Every reinsurance-type contract shall be submitted on an informational basis to the Department prior to the date of marketing of any POS contract for which the reinsurance-type contract is being purchased.

1. The POS contract and evidence of coverage submitted pursuant to N.J.A.C. 11:24-14.3(b) or (c) shall be disapproved if the reinsurance-type contract fails to properly reflect the provisions of this subchapter or otherwise does not reflect a transfer of risk for the cost of the out-of-network services from the HMO to the reinsurer.

N.J. Admin. Code § 11:24-14.5

Amended by R.1997 d.68, effective 2/18/1997 (operative July 1, 1997).
See: 28 N.J.R. 2456(a), 28 N.J.R. 3118(b), 29 N.J.R. 625(a).
Substituted "Department of Health and Senior Services" for "Department of Health" and "Department of Banking and Insurance" for "Department of Insurance".
Amended by R.2000 d.183, effective 5/1/2000.
See: 31 N.J.R. 953(a), 32 N.J.R. 1544(a).
In (f), added 1.