CHAPTER 10. COMPREHENSIVE HEALTH INSURANCE
IC 27-8-10
Chapter 10. Comprehensive Health Insurance
IC 27-8-10-1
Definitions
Sec. 1. (a) The definitions in this section apply throughout this
chapter.
(b) "Association" means the Indiana comprehensive health
insurance association established under section 2.1 of this chapter.
(c) "Association policy" means a policy issued by the association
that provides coverage specified in section 3 of this chapter. The
term does not include a Medicare supplement policy that is issued
under section 9 of this chapter.
(d) "Carrier" means an insurer providing medical, hospital, or
surgical expense incurred health insurance policies.
(e) "Church plan" means a plan defined in the federal Employee
Retirement Income Security Act of 1974 under 26 U.S.C. 414(e).
(f) "Commissioner" refers to the insurance commissioner.
(g) "Creditable coverage" has the meaning set forth in the federal
Health Insurance Portability and Accountability Act of 1996 (26
U.S.C. 9801(c)(1)).
(h) "Eligible expenses" means those charges for health care
services and articles provided for in section 3 of this chapter.
(i) "Federal income poverty level" has the meaning set forth in
IC 12-15-2-1.
(j) "Federally eligible individual" means an individual:
(1) for whom, as of the date on which the individual seeks
coverage under this chapter, the aggregate period of creditable
coverage is at least eighteen (18) months and whose most recent
prior creditable coverage was under a:
(A) group health plan;
(B) governmental plan; or
(C) church plan;
or health insurance coverage in connection with any of these
plans;
(2) who is not eligible for coverage under:
(A) a group health plan;
(B) Part A or Part B of Title XVIII of the federal Social
Security Act; or
(C) a state plan under Title XIX of the federal Social
Security Act (or any successor program);
and does not have other health insurance coverage;
(3) with respect to whom the individual's most recent coverage
was not terminated for factors relating to nonpayment of
premiums or fraud;
(4) who, if after being offered the option of continuation
coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (COBRA) (29 U.S.C. 1191b(d)(1)),
or under a similar state program, elected such coverage; and
(5) who, if after electing continuation coverage described in
subdivision (4), has exhausted continuation coverage under the
provision or program.
(k) "Governmental plan" means a plan as defined under the
federal Employee Retirement Income Security Act of 1974 (26
U.S.C. 414(d)) and any plan established or maintained for its
employees by the United States government or by any agency or
instrumentality of the United States government.
(l) "Group health plan" means an employee welfare benefit plan
(as defined in 29 U.S.C. 1167(1)) to the extent that the plan provides
medical care payments to, or on behalf of, employees or their
dependents, as defined under the terms of the plan, directly or
through insurance, reimbursement, or otherwise.
(m) "Health care facility" means any institution providing health
care services that is licensed in this state, including institutions
engaged principally in providing services for health maintenance
organizations or for the diagnosis or treatment of human disease,
pain, injury, deformity, or physical condition, including a general
hospital, special hospital, mental hospital, public health center,
diagnostic center, treatment center, rehabilitation center, extended
care facility, skilled nursing home, nursing home, intermediate care
facility, tuberculosis hospital, chronic disease hospital, maternity
hospital, outpatient clinic, home health care agency, bioanalytical
laboratory, or central services facility servicing one (1) or more such
institutions.
(n) "Health care institutions" means skilled nursing facilities,
home health agencies, and hospitals.
(o) "Health care provider" means any physician, hospital,
pharmacist, or other person who is licensed in Indiana to furnish
health care services.
(p) "Health care services" means any services or products
included in the furnishing to any individual of medical care, dental
care, or hospitalization, or incident to the furnishing of such care or
hospitalization, as well as the furnishing to any person of any other
services or products for the purpose of preventing, alleviating,
curing, or healing human illness or injury.
(q) "Health insurance" means hospital, surgical, and medical
expense incurred policies, nonprofit service plan contracts, health
maintenance organizations, limited service health maintenance
organizations, and self-insured plans. However, the term "health
insurance" does not include short term travel accident policies,
accident only policies, fixed indemnity policies, automobile medical
payment, or incidental coverage issued with or as a supplement to
liability insurance.
(r) "Insured" means all individuals who are provided qualified
comprehensive health insurance coverage under an individual policy,
including all dependents and other insured persons, if any.
(s) "Medicaid" means medical assistance provided by the state
under the Medicaid program under IC 12-15.
(t) "Medical care payment" means amounts paid for:
(1) the diagnosis, care, mitigation, treatment, or prevention of
disease or amounts paid for the purpose of affecting any
structure or function of the body;
(2) transportation primarily for and essential to Medicare
services referred to in subdivision (1); and
(3) insurance covering medical care referred to in subdivisions
(1) and (2).
(u) "Medically necessary" means health care services that the
association has determined:
(1) are recommended by a legally qualified physician;
(2) are commonly and customarily recognized throughout the
physician's profession as appropriate in the treatment of the
patient's diagnosed illness; and
(3) are not primarily for the scholastic education or career and
technical training of the provider or patient.
(v) "Medicare" means Title XVIII of the federal Social Security
Act (42 U.S.C. 1395 et seq.).
(w) "Policy" means a contract, policy, or plan of health insurance.
(x) "Policy year" means a twelve (12) month period during which
a policy provides coverage or obligates the carrier to provide health
care services.
(y) "Health maintenance organization" has the meaning set out in
IC 27-13-1-19.
(z) "Resident" means an individual who is:
(1) legally domiciled in Indiana for at least twelve (12) months
before applying for an association policy; or
(2) a federally eligible individual and legally domiciled in
Indiana.
(aa) "Self-insurer" means an employer who provides services,
payment for, or reimbursement of any part of the cost of health care
services other than payment of insurance premiums or subscriber
charges to a carrier. However, the term "self-insurer" does not
include an employer who is exempt from state insurance regulation
by federal law, or an employer who is a political subdivision of the
state of Indiana.
(bb) "Services of a skilled nursing facility" means services that
must commence within fourteen (14) days following a confinement
of at least three (3) consecutive days in a hospital for the same
condition.
(cc) "Skilled nursing facility", "home health agency", "hospital",
and "home health services" have the meanings assigned to them in 42
U.S.C. 1395x.
(dd) "Medicare supplement policy" means an individual policy of
accident and sickness insurance that is designed primarily as a
supplement to reimbursements under Medicare for the hospital,
medical, and surgical expenses of individuals who are eligible for
Medicare benefits.
(ee) "Limited service health maintenance organization" has the
meaning set forth in IC 27-13-34-4.
As added by Acts 1981, P.L.249, SEC.1. Amended by P.L.253-1989,
SEC.1; P.L.1-1990, SEC.260; P.L.2-1992, SEC.785; P.L.26-1994,
SEC.13; P.L.116-1994, SEC.64; P.L.2-1995, SEC.107;
P.L.188-1995, SEC.8; P.L.91-1998, SEC.12; P.L.1-2001, SEC.33;
P.L.193-2003, SEC.3; P.L.234-2007, SEC.165.
IC 27-8-10-2
Repealed
(Repealed by P.L.1-1990, SEC.261.)
IC 27-8-10-2.1
Comprehensive health insurance association; establishment; board
of directors; plan of operation; powers and duties
Sec. 2.1. (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 may be:
(1) not more than 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 for an insured whose family income is
less than three hundred fifty-one percent (351%) of the federal
income poverty level for the same size family; and
(2) an amount equal to:
(A) not less than one hundred fifty-one percent (151%); and
(B) not more than two hundred percent (200%);
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, for an insured whose family
income is more than three hundred fifty percent (350%) of the
federal income poverty level for the same size family.
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).
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.
IC 27-8-10-2.2
Repealed
(Repealed by P.L.1-2007, SEC.248.)
IC 27-8-10-2.3
Reporting requirements
Sec. 2.3. (a) A member shall, not later than October 31 of each
year, certify an independently audited report to the:
(1) association;
(2) legislative council; and
(3) department of insurance;
of the amount of tax credits taken against assessments by the member
under section 2.1 (as in effect December 31, 2004) or 2.4 of this
chapter during the previous calendar year. A report certified under
this section to the legislative council must be in an electronic format
under IC 5-14-6.
(b) A member shall, not later than October 31 of each year, certify
an independently audited report to the association of the amount of
assessments paid by the member against which a tax credit has not
been taken under section 2.1 (as in effect December 31, 2004) or 2.4
of this chapter as of the date of the report.
As added by P.L.167-2002, SEC.1. Amended by P.L.28-2004,
SEC.168; P.L.51-2004, SEC.3; P.L.2-2005, SEC.72; P.L.1-2006,
SEC.488.
IC 27-8-10-2.4
Tax credits
Sec. 2.4. (a) Beginning January 1, 2005, a member that, before
January 1, 2005, has:
(1) paid an assessment; and
(2) not taken a credit against taxes;
under section 2.1 of this chapter (as in effect December 31, 2004) is
not entitled to claim or carry forward the unused tax credit except as
provided in this section.
(b) A member described in subsection (a) may, for each taxable
year beginning after December 31, 2006, take a credit of not more
than ten percent (10%) of the amount of the assessments paid before
January 1, 2005, against which a tax credit has not been taken before
January 1, 2005. A credit under this subsection may be taken against
premium taxes, adjusted gross income taxes, or any combination of
these, or similar taxes upon revenues or income of the member that
may be imposed by the state, up to the amount of the taxes due for
each taxable year.
(c) If the maximum amount of a tax credit determined under
subsection (b) for a taxable year exceeds a member's liability for the
taxes described in subsection (b), the member may carry the unused
portion of the tax credit forward to subsequent taxable years. Tax
credits carried forward under this subsection are not subject to the
ten percent (10%) limit set forth in subsection (b).
(d) The total amount of credits taken by a member under this
section in all taxable years may not exceed the total amount of
assessments paid by the member before January 1, 2005, minus the
total amount of tax credits taken by the member under section 2.1 of
this chapter (as in effect December 31, 2004) before January 1, 2005.
As added by P.L.51-2004, SEC.4.
IC 27-8-10-2.5
Members; general requirements
Sec. 2.5. (a) A member shall comply with the association's plan
of operation.
(b) A member assessment under section 2.1 of this chapter is due
not more than thirty (30) days after the member receives written
notice of the assessment. A member that pays an assessment after the
due date shall pay interest on the assessment at the rate of six percent
(6%) per annum.
As added by P.L.51-2004, SEC.5.
IC 27-8-10-2.6
Member and health care provider grievances
Sec. 2.6. (a) If a:
(1) member is aggrieved by an act of the association; or
(2) health care provider is aggrieved by an act of the association
with respect to reimbursement to the provider under an
association policy;
the member or health care provider shall, not more than ninety (90)
days after the act occurs, appeal to the board of directors for review
of the act.
(b) If:
(1) within thirty (30) days after an appeal is filed under
subsection (a), the board of directors has not acted on the
appeal; or
(2) a member or health care provider is aggrieved by a final
action or decision of the board of directors;
the member or health care provider may appeal to the commissioner.
(c) An appeal to the commissioner under subsection (b) must be
filed less than thirty (30) days after the:
(1) expiration of the thirty (30) day period specified in
subsection (b)(1); or
(2) action or decision specified in subsection (b)(2).
(d) The commissioner shall, not more than forty-five (45) days
after an appeal is filed under subsection (c), take a final action or
issue an order regarding the appeal.
(e) A final action or order of the commissioner on an appeal filed
under this section is subject to judicial review.
(f) If a member or health care provider sues the association, the
court shall not award to the member or health care provider:
(1) attorney's fees or costs; or
(2) punitive damages.
As added by P.L.51-2004, SEC.6.
IC 27-8-10-3
Association policy coverage; reimbursement methods; eligible
expenses; managed care
Sec. 3. (a) An association policy issued under this chapter may
pay an amount for medically necessary eligible expenses related to
the diagnosis or treatment of illness or injury that exceed the
deductible and coinsurance amounts applicable under section 4 of
this chapter. Payment under an association policy must be based on
one (1) or a combination of the following reimbursement methods,
as determined by the board of directors:
(1) The association's usual and customary fee schedule in effect
on January 1, 2004. If payment is based on the usual and
customary fee schedule in effect on January 1, 2004, the rates
of reimbursement under the fee schedule must be adjusted
annually by a percentage equal to the percentage change in the
Indiana medical care component of the Consumer Price Index
for all Urban Consumers, as published by the United States
Bureau of Labor Statistics during the preceding calendar year.
(2) A health care provider network arrangement. If payment is
based on a health care provider network arrangement,
reimbursement under an association policy must be made
according to:
(A) a network fee schedule for network health care providers
and nonnetwork health care providers; and
(B) any additional coinsurance that applies to the insured
under the association policy if the insured obtains health
care services from a nonnetwork health care provider.
(b) Eligible expenses are the charges for the following health care
services and articles to the extent furnished by a health care provider
in an emergency situation or furnished or prescribed by a physician:
(1) Hospital services, including charges for the institution's
most common semiprivate room, and for private room only
when medically necessary, but limited to a total of one hundred
eighty (180) days in a year.
(2) Professional services for the diagnosis or treatment of
injuries, illnesses, or conditions, other than mental or dental,
that are rendered by a physician or, at the physician's direction,
by the physician's staff of registered or licensed nurses, and
allied health professionals.
(3) The first twenty (20) professional visits for the diagnosis or
treatment of one (1) or more mental conditions rendered during
the year by one (1) or more physicians or, at their direction, by
their staff of registered or licensed nurses, and allied health
professionals.
(4) Drugs and contraceptive devices requiring a physician's
prescription.
(5) Services of a skilled nursing facility for not more than one
hundred eighty (180) days in a year.
(6) Services of a home health agency up to two hundred seventy
(270) days of service a year.
(7) Use of radium or other radioactive materials.
(8) Oxygen.
(9) Anesthetics.
(10) Prostheses, other than dental.
(11) Rental of durable medical equipment which has no
personal use in the absence of the condition for which
prescribed.
(12) Diagnostic X-rays and laboratory tests.
(13) Oral surgery for:
(A) excision of partially or completely erupted impacted
teeth;
(B) excision of a tooth root without the extraction of the
entire tooth; or
(C) the gums and tissues of the mouth when not performed
in connection with the extraction or repair of teeth.
(14) Services of a physical therapist and services of a speech
therapist.
(15) Professional ambulance services to the nearest health care
facility qualified to treat the illness or injury.
(16) Other medical supplies required by a physician's orders.
An association policy may also include comparable benefits for those
who rely upon spiritual means through prayer alone for healing upon
such conditions, limitations, and requirements as may be determined
by the board of directors.
(c) A managed care organization that issues an association policy
may not refuse to enter into an agreement with a hospital solely
because the hospital has not obtained accreditation from an
accreditation organization that:
(1) establishes standards for the organization and operation of
hospitals;
(2) requires the hospital to undergo a survey process for a fee
paid by the hospital; and
(3) was organized and formed in 1951.
(d) This section does not prohibit a managed care organization
from using performance indicators or quality standards that:
(1) are developed by private organizations; and
(2) do not rely upon a survey process for a fee charged to the
hospital to evaluate performance.
(e) For purposes of this section, if benefits are provided in the
form of services rather than cash payments, their value shall be
determined on the basis of their monetary equivalency.
(f) The following are not eligible expenses in any association
policy within the scope of this chapter:
(1) Services for which a charge is not made in the absence of
insurance or for which there is no legal obligation on the part of
the patient to pay.
(2) Services and charges made for benefits provided under the
laws of the United States, including Medicare and Medicaid,
military service connected disabilities, medical services
provided for members of the armed forces and their dependents
or for employees of the armed forces of the United States,
medical services financed in the future on behalf of all citizens
by the United States.
(3) Benefits which would duplicate the provision of services or
payment of charges for any care for injury or disease either:
(A) arising out of and in the course of an employment
subject to a worker's compensation or similar law; or
(B) for which benefits are payable without regard to fault
under a coverage statutorily required to be contained in any
motor vehicle or other liability insurance policy or
equivalent self-insurance.
However, this subdivision does not authorize exclusion of
charges that exceed the benefits payable under the applicable
worker's compensation or no-fault coverage.
(4) Care which is primarily for a custodial or domiciliary
purpose.
(5) Cosmetic surgery unless provided as a result of an injury or
medically necessary surgical procedure.
(6) Any charge for services or articles the provision of which is
not within the scope of the license or certificate of the
institution or individual rendering the services.
(g) The coverage and benefit requirements of this section for
association policies may not be altered by any other inconsistent state
law without specific reference to this chapter indicating a legislative
intent to add or delete from the coverage requirements of this
chapter.
(h) This chapter does not prohibit the association from issuing
additional types of health insurance policies with different types of
benefits that, in the opinion of the board of directors, may be of
benefit to the citizens of Indiana.
(i) This chapter does not prohibit the association or its
administrator from implementing uniform procedures to review the
medical necessity and cost effectiveness of proposed treatment,
confinement, tests, or other medical procedures. Those procedures
may take the form of preadmission review for nonemergency
hospitalization, case management review to verify that covered
individuals are aware of treatment alternatives, or other forms of
utilization review. Any cost containment techniques of this type must
be adopted by the board of directors and approved by the
commissioner.
As added by Acts 1981, P.L.249, SEC.1. Amended by P.L.28-1988,
SEC.106; P.L.253-1989, SEC.3; P.L.116-1994, SEC.66;
P.L.259-1995, SEC.1; P.L.51-2004, SEC.7.
IC 27-8-10-3.2
Balance billing
Sec. 3.2. Except as provided in section 3.6 of this chapter, a health
care provider shall not bill an insured for any amount that exceeds:
(1) the payment made by the association under the association
policy for eligible expenses incurred by the insured; and
(2) any copayment, deductible, or coinsurance amounts
applicable under the association policy.
As added by P.L.51-2004, SEC.8.
IC 27-8-10-3.5
Chronic disease and pharmaceutical management programs
Sec. 3.5. (a) The association shall:
(1) approve and implement chronic disease management and
pharmaceutical management programs based on:
(A) an analysis of the highest cost health care services
covered under association policies;
(B) a review of chronic disease management and
pharmaceutical management programs used in populations
similar to insureds; and
(C) a determination of the chronic disease management and
pharmaceutical management programs expected to best
improve health outcomes in a cost effective manner;
(2) consider recommendations of the drug utilization review
board established by IC 12-15-35-19 concerning chronic disease
management and pharmaceutical management programs;
(3) when practicable, coordinate programs adopted under this
section with comparable programs implemented by the state;
and
(4) implement a copayment structure for prescription drugs
covered under an association policy.
(b) A program approved and implemented under this section may
not require prior authorization for a prescription drug that is
prescribed for the treatment of:
(1) human immunodeficiency virus (HIV) or acquired immune
deficiency syndrome (AIDS) and is included on the AIDS drug
assistance program formulary adopted by the state department
of health under the federal Ryan White CARE Act (42 U.S.C.
300ff et seq.); or
(2) hemophilia according to recommendations of the:
(A) Advisory Committee on Blood Safety and Availability
of the United States Department of Health and Human
Services; or
(B) Medical and Scientific Advisory Council of the National
Hemophilia Foundation.
(c) The copayment structure implemented under subsection (a)
must be based on an annual actuarial analysis.
(d) A disease management program for which federal funding is
available is considered to be approved by the association under this
section.
(e) An insured who has a chronic disease for which at least one
(1) chronic disease management program is approved under this
section shall participate in an approved chronic disease management
program for the chronic disease as a condition of coverage of
treatment for the chronic disease under an association policy.
As added by P.L.193-2003, SEC.5.
IC 27-8-10-3.6
Mail order or Internet based pharmacy
Sec. 3.6. (a) The association shall approve a mail order or Internet
based pharmacy (as defined in IC 25-26-18-1) through which an
insured may obtain prescription drugs covered under an association
policy.
(b) A prescription drug that is covered under an association policy
is covered if the prescription drug is obtained from:
(1) a pharmacy approved under subsection (a); or
(2) a pharmacy that:
(A) is not approved under subsection (a); and
(B) agrees to sell the prescription drug at the same price as
a pharmacy approved under subsection (a).
(c) A prescription drug that is:
(1) covered under an association policy; and
(2) obtained from a pharmacy not described in subsection (b);
is covered for an amount equal to the price at which a pharmacy
described in subsection (b) will sell the prescription drug, with the
remainder of the charge for the prescription drug to be paid by the
insured.
As added by P.L.193-2003, SEC.6.
IC 27-8-10-4
Policies; deductible and coinsurance requirements; limitations
Sec. 4. (a) Subject to the limitation provided in subsection (c), an
association policy offered in accordance with this chapter must
impose a five hundred dollar ($500) deductible on a per person per
policy year basis. The deductible must be applied to the first five
hundred dollars ($500) of eligible expenses incurred by the covered
person.
(b) Subject to the limitation provided in subsection (c), a
mandatory coinsurance requirement shall be imposed at the rate of
twenty percent (20%) of eligible expenses in excess of the mandatory
deductible.
(c) The maximum aggregate out-of-pocket payments for eligible
expenses by the insured in the form of deductibles and coinsurance
may not exceed one thousand five hundred dollars ($1,500) per
individual or two thousand five hundred dollars ($2,500) per family,
per policy year.
As added by Acts 1981, P.L.249, SEC.1. Amended by P.L.253-1989,
SEC.4.
IC 27-8-10-5
Repealed
(Repealed by P.L.1-1990, SEC.263.)
IC 27-8-10-5.1
Policies; eligible persons; dependent coverage; preexisting
conditions
Sec. 5.1. (a) A person is not eligible for an association policy if
the person is eligible for Medicaid. A person other than a federally
eligible individual may not apply for an association policy unless the
person has applied for Medicaid not more than sixty (60) days before
applying for the association policy.
(b) Except as provided in subsection (c), a person is not eligible
for an association policy if, at the effective date of coverage, the
person has or is eligible for coverage under any insurance plan that
equals or exceeds the minimum requirements for accident and
sickness insurance policies issued in Indiana as set forth in IC 27.
However, an offer of coverage described in IC 27-8-5-2.5(e) (expired
July 1, 2007, and removed), IC 27-8-5-2.7, IC 27-8-5-19.2(e)
(expired July 1, 2007, and repealed), or IC 27-8-5-19.3 does not
affect an individual's eligibility for an association policy under this
subsection. Coverage under any association policy is in excess of,
and may not duplicate, coverage under any other form of health
insurance.
(c) Except as provided in IC 27-13-16-4 and subsection (a), a
person is eligible for an association policy upon a showing that:
(1) the person has been rejected by one (1) carrier for coverage
under any insurance plan that equals or exceeds the minimum
requirements for accident and sickness insurance policies issued
in Indiana, as set forth in IC 27, without material underwriting
restrictions;
(2) an insurer has refused to issue insurance except at a rate
exceeding the association plan rate; or
(3) the person is a federally eligible individual.
For the purposes of this subsection, eligibility for Medicare coverage
does not disqualify a person who is less than sixty-five (65) years of
age from eligibility for an association policy.
(d) Coverage under an association policy terminates as follows:
(1) On the first date on which an insured is no longer a resident
of Indiana.
(2) On the date on which an insured requests cancellation of the
association policy.
(3) On the date of the death of an insured.
(4) At the end of the policy period for which the premium has
been paid.
(5) On the first date on which the insured no longer meets the
eligibility requirements under this section.
(e) An association policy must provide that coverage of a
dependent unmarried child terminates when the child becomes
nineteen (19) years of age (or twenty-five (25) years of age if the
child is enrolled full time in an accredited educational institution).
The policy must also provide in substance that attainment of the
limiting age does not operate to terminate a dependent unmarried
child's coverage while the dependent is and continues to be both:
(1) incapable of self-sustaining employment by reason of
mental retardation or mental or physical disability; and
(2) chiefly dependent upon the person in whose name the
contract is issued for support and maintenance.
However, proof of such incapacity and dependency must be
furnished to the carrier within one hundred twenty (120) days of the
child's attainment of the limiting age, and subsequently as may be
required by the carrier, but not more frequently than annually after
the two (2) year period following the child's attainment of the
limiting age.
(f) An association policy that provides coverage for a family
member of the person in whose name the contract is issued must, as
to the family member's coverage, also provide that the health
insurance benefits applicable for children are payable with respect to
a newly born child of the person in whose name the contract is issued
from the moment of birth. The coverage for newly born children
must consist of coverage of injury or illness, including the necessary
care and treatment of medically diagnosed congenital defects and
birth abnormalities. If payment of a specific premium is required to
provide coverage for the child, the contract may require that
notification of the birth of a child and payment of the required
premium must be furnished to the carrier within thirty-one (31) days
after the date of birth in order to have the coverage continued beyond
the thirty-one (31) day period.
(g) Except as provided in subsection (h), an association policy
may contain provisions under which coverage is excluded during a
period of three (3) months following the effective date of coverage
as to a given covered individual for preexisting conditions, as long
as medical advice or treatment was recommended or received within
a period of three (3) months before the effective date of coverage.
This subsection may not be construed to prohibit preexisting
condition provisions in an insurance policy that are more favorable
to the insured.
(h) If a person applies for an association policy within six (6)
months after termination of the person's coverage under a health
insurance arrangement and the person meets the eligibility
requirements of subsection (c), then an association policy may not
contain provisions under which:
(1) coverage as to a given individual is delayed to a date after
the effective date or excluded from the policy; or
(2) coverage as to a given condition is denied;
on the basis of a preexisting health condition. This subsection may
not be construed to prohibit preexisting condition provisions in an
insurance policy that are more favorable to the insured.
(i) For purposes of this section, coverage under a health insurance
arrangement includes, but is not limited to, coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985.
As added by P.L.1-1990, SEC.264. Amended by P.L.23-1993,
SEC.155; P.L.130-1994, SEC.46; P.L.116-1994, SEC.67;
P.L.26-1994, SEC.15; P.L.2-1995, SEC.109; P.L.91-1998, SEC.14;
P.L.207-1999, SEC.5 and P.L.233-1999, SEC.11; P.L.193-2003,
SEC.7; P.L.211-2003, SEC.5; P.L.97-2004, SEC.100; P.L.211-2005,
SEC.3; P.L.3-2008, SEC.213.
IC 27-8-10-6
Policies; renewal provisions; election to continue coverage upon
death of policyholder
Sec. 6. (a) An association policy offered under this chapter must
contain provisions under which the association is obligated to renew
the contract until:
(1) the date on which coverage terminates under section 5.1 of
this chapter; or
(2) the day on which the individual in whose name the contract
is issued first becomes eligible for Medicare coverage, except
that in a family policy covering both husband and wife, the age
of the younger spouse must be used as the basis for meeting the
durational requirement of this subdivision.
(b) The association may not change the rates for association
policies or Medicare supplement policies except on a class basis with
a clear disclosure in the policy of the association's right to do so.
(c) An association policy offered under this chapter must provide
that upon the death of the individual in whose name the contract is
issued, every other individual then covered under the contract may
elect, within a period specified in the contract, to continue coverage
under the same or a different contract until such time as he would
have ceased to be entitled to coverage had the individual in whose
name the contract was issued lived.
As added by Acts 1981, P.L.249, SEC.1. Amended by P.L.116-1994,
SEC.68; P.L.193-2003, SEC.8.
IC 27-8-10-7
Rules; adoption
Sec. 7. The commissioner may adopt rules, under IC 4-22-2, that:
(1) provide for disclosure by carriers of the availability of
insurance coverage from the association; and
(2) implement this chapter.
As added by Acts 1981, P.L.249, SEC.1.
IC 27-8-10-8
Civil or criminal liability of association or members
Sec. 8. Neither the participation by carriers or members in the
association, the establishment of rates, forms, or procedures for
coverages issued by the association, nor any joint or collective action
required by this chapter shall be the basis of any legal action, civil,
or criminal liability against the association or members of it either
jointly or separately.
As added by Acts 1981, P.L.249, SEC.1.
IC 27-8-10-9
Medicare supplement policies
Sec. 9. (a) The association may issue Medicare supplement
policies to individuals who reside in Indiana.
(b) A Medicare supplement policy issued under this section:
(1) must be based on a model policy adopted by the
commissioner under IC 27-8-13-10.1; and
(2) must meet the standards for Medicare supplement policy
benefits established under IC 27-8-13-10.1.
(c) A Medicare supplement policy issued under this section is not
subject to the deductible and coinsurance requirements and the
eligibility restrictions applying to association policies under sections
4 and 5.1 of this chapter. However, the association may provide that
an individual is not eligible for a Medicare supplement policy issued
under this section unless the individual has applied to one (1) carrier
for a Medicare supplement policy and the application of the
individual has been rejected.
As added by P.L.116-1994, SEC.69.
IC 27-8-10-10
Eligibility guidelines
Sec. 10. Before January 1, 1996, the board of directors of the
association shall establish eligibility guidelines for the issuance of an
association policy under this chapter to prohibit an:
(1) employer;
(2) insurance producer; or
(3) insurance broker;
from placing in or referring to the association an individual who
works for an employer who offers employees an employee welfare
benefit plan (as defined in 29 U.S.C. 1002).
As added by P.L.93-1995, SEC.9. Amended by P.L.178-2003,
SEC.64.
IC 27-8-10-11.2
Use of diagnostic or procedure codes
Sec. 11.2. (a) Not more than ninety (90) days after the effective
date of a diagnostic or procedure code described in this subsection:
(1) the association shall begin using the most current version of
the:
(A) current procedural terminology (CPT);
(B) international classification of diseases (ICD);
(C) American Psychiatric Association's Diagnostic and
Statistical Manual of Mental Disorders (DSM);
(D) current dental terminology (CDT);
(E) Healthcare common procedure coding system (HCPCS);
and
(F) third party administrator (TPA);
codes under which the association pays claims for services
provided under an association policy; and
(2) a health care provider shall begin using the most current
version of the:
(A) current procedural terminology (CPT);
(B) international classification of diseases (ICD);
(C) American Psychiatric Association's Diagnostic and
Statistical Manual of Mental Disorders (DSM);
(D) current dental terminology (CDT);
(E) Healthcare common procedure coding system (HCPCS);
and
(F) third party administrator (TPA);
codes under which the health care provider submits claims for
payment for services provided under an association policy.
(b) If a health care provider provides services that are covered
under an association policy:
(1) after the effective date of the most current version of a
diagnostic or procedure code described in subsection (a); and
(2) before the association begins using the most current version
of the diagnostic or procedure code;
the association shall reimburse the health care provider under the
version of the diagnostic or procedure code that was in effect on the
date that the services were provided.
As added by P.L.161-2001, SEC.3. Amended by P.L.66-2002,
SEC.15.
IC 27-8-10-12
Repealed
(Repealed by P.L.51-2004, SEC.10.)
IC 27-8-10-13
Repealed
(Repealed by P.L.51-2004, SEC.10.)
IC 27-8-10-14
Repealed
(Repealed by P.L.1-2007, SEC.248.)