RELATES TO:
KRS
304.1-050,
304.2-310,
304.4-010,
304.9-052,
304.17A-200,
304.17A-245,
304.17A-750-304.17A-770,
304.47-020
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
304.2-110(1) authorizes the
Commissioner of Insurance to promulgate reasonable administrative regulations
necessary for or as an aid to the effectuation of any provision of the Kentucky
Insurance Code as defined in
KRS
304.1-010.
KRS
304.17A-752(3) authorizes
the commissioner to promulgate administrative regulations necessary to
administer
KRS
304.17A-750 through
304.17A-770.
KRS
304.17A-758(8) requires the
commissioner to promulgate regulations to establish fees for the initial
registration and renewal of registration of an insurance purchasing outlet.
KRS
304.17A-760(1)(i) requires
the commissioner to promulgate administrative regulations to establish a
process for insurance purchasing outlets to prepare and file annual reports on
the operations of the insurance purchasing outlet.
KRS
304.17A-762(3)(c) requires
the commissioner to promulgate regulations to establish disclosures that are
required to be made by the insurance purchasing outlet to insurance purchasing
outlet members when the member enrolls.
KRS
304.17A-768(8) requires the
commissioner to promulgate administrative regulations to implement the
provisions of that section involving vouchers. This administrative regulation
establishes insurance purchasing outlet requirements, procedures for
registering insurance purchasing outlets, and the voucher process.
Section 1. Definitions.
(1) "Business entity" means an applicant for
a certificate of registration to act as an insurance purchasing
outlet.
(2) "Commissioner" is
defined by
KRS
304.1-050(1).
(3) "Department" is defined by
KRS
304.1-050(2).
(4) "Eligible employee" is defined by
KRS
304.17A-750(1).
(5) "Employer" is defined by
KRS
304.17A-750(3).
(6) "Insurance purchasing outlet" is defined
by
KRS
304.17A-750(4).
(7) "Insurance purchasing outlet member" or
"member" is defined by
KRS
304.17A-750(5).
(8) "Voucher" is defined by
KRS
304.17A-750(7).
Section 2. Application for
Certificate of Registration.
(1) A business
entity seeking issuance of or renewal of a certificate of registration shall
submit to the department the following:
(a) A
completed Insurance Purchasing Outlet Application for Registration,
HIPMC-IPO-1;
(b) All the
documentation and information required by
KRS
304.17A-754(4);
and
(c) A fee as required by
Section 3 of this administrative regulation.
(2) Since
KRS
304.4-010(2) requires all
fees payable under the insurance code to be collected in advance, the period of
time in which the commissioner may act on an application for issuance of a
certificate of registration, pursuant to
KRS
304.17A-754(3), shall not
commence, until the following are received by the department :
(a) All the information required by
KRS
304.17A-750 through
304.17A-768
and Sections 2 through 8 of this administrative regulation; and
(b) The appropriate fee pursuant to Section 3
of this administrative regulation.
(3) A business entity seeking to renew a
certificate of registration to act as an insurance purchasing outlet shall file
an application to renew a certificate of registration:
(a) Biennially in accordance with
KRS
304.17A-758(6);
and
(b) At least ninety (90) days
prior to expiration of the certificate of registration.
(4) Upon receipt of an application for
issuance or renewal of certificate of registration, the department shall:
(a) Inform the applicant if supplemental
information is or is not needed, and if supplemental information is needed:
1. The applicant shall submit the requested
information within thirty (30) days; or
2. If requested information is not provided
to the department within thirty (30) days, the department shall:
a. Deny the application for issuance or
renewal of a certificate of registration to act as an insurance purchasing
outlet; and
b. Not refund the
application fee;
(b) Review the application and material
required by
KRS
304.17A-754(4) and Sections
2 through 8 of this administrative regulation; and
(c) Approve or deny issuance or renewal of
the certificate of registration to act as an insurance purchasing
outlet.
(5) Pursuant to
KRS
304.17A-754(5), an insurance
purchasing outlet shall submit to the department a change to the original
documentation or information that was submitted to the department for issuance
or renewal of a certificate of registration as follows:
(a) All updated documentation or information
shall be submitted to the department within thirty (30) days after the
insurance purchasing outlet knew of the change; and
(b) A fee to submit updated information shall
be paid in accordance with Section 3 of this administrative
regulation.
Section
3. Fees.
(1) An application for
issuance of a certificate of registration to act as an insurance purchasing
outlet shall be accompanied by a fee of $200 to pay administrative and other
costs associated with carrying out the provisions of
KRS
304.17A-750 through
304.17A-768.
(2) A submission to change the information
filed by an insurance purchasing outlet, in accordance with
KRS
304.17A-754(5), and Sections
2 through 8 of this administrative regulation, shall be accompanied by a fee of
twenty-five (25) dollars to pay administrative and other costs associated with
carrying out the provisions of
KRS
304.17A-750 through
304.17A-768.
(3) An application to renew a certificate of
registration as an insurance purchasing outlet, in accordance with
KRS
304.17A-758(6), shall be
accompanied by a fee of fifty (50) dollars to pay administrative and other
costs associated with carrying out the provisions of
KRS
304.17A-750 through
304.17A-768.
Section 4. Annual and Quarterly
Financial Statements Required. In accordance with requirements and timeframes
established in
KRS
304.17A-758 and
304.17A-760,
an insurance purchasing outlet shall:
(1)
Annually, submit:
(a) In accordance with the
timeframes established in
KRS
304.17A-758(4), an annual
financial statement and an audited financial statement, in accordance with the
Annual Financial Statement of Insurance Purchasing Outlet, HIPMC-IPO-3;
and
(b) Within sixty (60) days
after the end of the fiscal year of the insurance purchasing outlet, a report
on operations in accordance with the Annual Report on Operations of Insurance
Purchasing Outlet, HIPMC-IPO-2. The report shall include:
1. Membership enrollment in tabular form by:
a. Month;
b. Quarter; and
c. Year-to-date; and
2. Discussion and analysis of financial
condition and results of operations.
(2) In accordance with the timeframe
established in
KRS
304.17A-758(4), quarterly,
submit a financial statement, in accordance with the format established in the
Quarterly Financial Statement of Insurance Purchasing Outlet,
HIPMC-IPO-4.
Section 5. Advertising and
Marketing Materials Required to be Filed. An insurance purchasing outlet shall
file all advertising and marketing materials, of any nature, with the
commissioner for informational purposes:
(1)
Materials submitted shall contain a form number on the lower left hand corner
of every page of the filed document; and
(2) A filing fee of five (5) dollars for each
form or marketing material shall be required to be submitted at the time of the
filing.
Section 6.
Disclosures Required.
(1) In writing, and at
the time of enrollment, an insurance purchasing outlet shall provide
disclosures to its members as follows:
(a)
Premium payment procedures;
(b)
Voucher payment procedures;
(c) The
insurance purchasing outlet's reinstatement policy for members terminated for
nonpayment of premium; and
(d) As
required by
KRS
304.17A-762(3).
(2) In writing, the insurance
purchasing outlet shall provide the following disclosures to an eligible person
or eligible employee when an application for membership is submitted:
(a) The appeal rights for a person denied
membership in the insurance purchasing outlet as required by
KRS
304.17A-754(4)(c);
and
(b) The enrollment procedures
of the insurance purchasing outlet.
Section 7. Vouchers.
(1) An insurance purchasing outlet shall:
(a) Accept all vouchers; and
(b) Submit the voucher to the insurance
purchasing outlet member's employer for payment within five (5) business days
of receipt of the voucher from the member.
(2) If the insurance purchasing outlet does
not receive payment for the voucher from the member's employer within ten (10)
business days of submission, the insurance purchasing outlet shall notify the
member, within three (3) business days, by certified mail return receipt
requested, that the member's employer failed to redeem the voucher within the
required time. At the same time, the insurance purchasing outlet shall also
notify the member that he may pay the premium amount directly to the insurance
purchasing outlet pursuant to
KRS
304.17A-768(2).
(3) A voucher shall contain the following
information:
(a) The name of the
employer;
(b) The mailing address
of the employer;
(c) The business
telephone number of the employer;
(d) The tax identification number of the
employer;
(e) The name of the
employee;
(f) The employee's Social
Security number;
(g) The dollar
amount of the voucher;
(h) The
dates during which the voucher is valid; and
(i) That the voucher is nonassignable and
nontransferable pursuant to
KRS
304.17A-768(1).
Section 8.
Reinstatement Policy Required.
(1) An
insurance purchasing outlet shall have a reinstatement policy for an eligible
employee and an eligible person who is terminated from the health benefit plan
for nonpayment of premium.
(2) An
eligible employee or an eligible person who has been terminated, pursuant to
KRS
304.17A-245, shall be reinstated as a member
of the insurance purchasing outlet if he or she meets the reinstatement
requirements of the insurance purchasing outlet and the insurer.
(3) An insurance purchasing outlet shall not
deny an eligible employee or an eligible person reinstatement based on any
health status-related factor listed in
KRS
304.17A-200 or consideration of medical loss
ratio.
(4) If premium is not paid
and the insurance purchasing outlet receives notification of termination for
the member, pursuant to
KRS
304.17A-245, the insurance purchasing outlet
shall notify the member, within five (5) business days of receiving
notification of termination from the insurer, that he or she is terminated. The
insurance purchasing outlet shall notify the member of his or her termination
by regular first class mail to the last known address of the member.
Section 9. Cessation of Operations
of the Insurance Purchasing Outlet.
(1) Upon a
decision to cease operating as an insurance purchasing outlet, the insurance
purchasing outlet shall:
(a) Immediately
notify the department, in writing, its decision to cease accepting new members
to the insurance purchasing outlet; and
(b) Submit the following to the department
ninety (90) days prior to ceasing operations:
1. Written notification of the cessation of
operations, including the date of cessation and the number of current members
of the insurance purchasing outlet; and
2. A written action plan for ceasing
operations, which shall be approved by the department and include:
a. Copies of letters that will be mailed to
members and insurers notifying them of the decision to cease operating as an
insurance purchasing outlet; and
b.
The projected date for processing all voucher and premium payments.
(2) Upon
receipt of a written notification as required in subsection (1) of this
section, the department shall review and act upon the action plan of the
insurance purchasing outlet.
(3)
Upon approval of an action plan to cease operations by the department, the
insurance purchasing outlet shall send written notification, at least sixty
(60) days in advance of the date that it will cease operations, to insurance
purchasing outlet members and insurers issuing health benefit plans to its
members.
(4) Upon being notified by
the insurance purchasing outlet of its decision to cease operations, the
insurer shall notify all members of the insurance purchasing outlet that the
health benefit plan offered through the insurance purchasing outlet shall be
terminated and that the member has the right to elect a conversion policy
pursuant to
KRS
304.17A-766.
Section 10. Hearing Process.
(1) An insurance purchasing outlet may
request a hearing pursuant to
KRS
304.2-310(2)(b) if the
commissioner :
(a) Denies an application for a
certificate of registration to act as an insurance purchasing outlet;
(b) Suspends or revokes a certificate of
registration held by an insurance purchasing outlet; or
(c) Imposes a civil penalty against an
insurance purchasing outlet.
(2) The commissioner may take administrative
action against an insurance purchasing outlet for any violation of
KRS
304.17A-750 through
304.17A-770,
304.47-020,
and Sections 2 through 9 of this administrative regulation.
Section 11. Material Incorporated
by Reference.
(1) The following material is
incorporated by reference:
(a) "Insurance
Purchasing Outlet Application for Registration," HIPMC-IPO-1, 7/02 ;
(b) "Annual Report on Operations of Insurance
Purchasing Outlet," HIPMC-IPO-2, 9/02 ;
(c) "Annual Financial Statement of Insurance
Purchasing Outlet," HIPMC-IPO-3, 9/02 ; and
(d) "Quarterly Financial Statement of
Insurance Purchasing Outlet," HIPMC-IPO-4, 9/02.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Kentucky Department of
Insurance, The Mayo-Underwood Building, 500 Mero Street, Frankfort, Kentucky
40601, Monday through Friday, 8 a.m. to 4:30 p.m. The material is also
available on the department Internet Web site at
https://insurance.ky.gov/ppc/CHAPTER.aspx.