760 IAC 1-73-7 - Health benefit plan
Authority: 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:
(i)
cash;
(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.".
Notes
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