Section 500.3543 - Third party administrator.
THE INSURANCE CODE OF 1956 (EXCERPT)
Act 218 of 1956
500.3543 Third party administrator.
Sec. 3543.
(1) With the commissioner's approval, a health maintenance organization may own or invest in a third party administrator. The commissioner shall grant approval upon being satisfied that all of the following conditions are met:
(a) The third party administrator is incorporated as a distinct legal entity under the business corporation act, 1972 PA 284, MCL 450.1101 to 450.2098, the nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192, or the Michigan limited liability company act, 1993 PA 23, MCL 450.4101 to 450.5200.
(b) The third party administrator has a certificate of authority issued pursuant to the third party administrator act, 1984 PA 218, MCL 550.901 to 550.962.
(c) Based on generally accepted accounting principles, the proposed or operating third party administrator is financially sound and maintains adequate working capital.
(d) The investment in the third party administrator by the health maintenance organization does not endanger the continued operation of the health maintenance organization.
(e) The third party administrator maintains financial records for its activities separate or separable from the financial records of the health maintenance organization.
(2) Except as otherwise provided in this chapter, a third party administrator operating under this section is fully subject to the third party administrator act, 1984 PA 218, MCL 550.901 to 550.962. Neither this section nor the operation of the third party administrator as a separate legal entity diminishes the commissioner's authority under this act or other laws regulating the health maintenance organization or their parent companies.
(3) An individual covered under a plan administered by a third party administrator operating under this section is not liable for incurred medical expenses for covered services if the plan sponsor continues to pay the medical expenses that are eligible for payment.
History: Add. 2000, Act 252, Imd. Eff. June 29, 2000
Popular Name: Act 218
Popular Name: HMO