Section 27-8-10-2.1 - Comprehensive health insurance association; establishment; board of directors; plan of operation; powers and duties(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).Amended by P.L. 229-2011, SEC. 251, eff. 7/1/2011.As added by P.L. 1-1990, SEC.262. Amended by P.L. 26-1991, SEC.27; P.L. 1-1994, SEC.136; P.L. 116-1994, SEC.65; P.L. 26-1994, SEC.14; P.L. 2-1995, SEC.108; P.L. 255-1995, SEC.9; P.L. 91-1998, SEC.13; P.L. 192-2002 (ss), SEC.169; P.L. 178-2003, SEC.63; P.L. 193-2003, SEC.4; P.L. 97-2004, SEC.99; P.L. 51-2004, SEC.1; P.L. 1-2007, SEC.186.