806 KAR 17:450. Insurance purchasing outlet requirements.
RELATES TO: KRS
304.2-310, 304.9-052, 304.17A-200, 304.17A-750-304.17A-770, 304.47-020
STATUTORY
AUTHORITY: KRS 304.2-110(1), 304.17A-752(3), 304.17A-758(8), 304.17A-760(1)(i),
304.17A-762(3)(c), 304.17A-768(8)
NECESSITY,
FUNCTION, AND CONFORMITY: KRS 304.2-110(1) authorizes the Executive Director
of Insurance to make 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 executive director
to promulgate administrative regulations necessary to administer KRS
304.17A-750 through 304.17A-770. KRS 304.17A-758(8) requires the executive director
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 executive director 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 executive director
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 executive director
to l 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) “Executive Director” of
Insurance.
(3) “Office” means Office of Insurance.
(4) "Eligible
employee" is defined in KRS 304.17A-750(1).
(5)
"Employer" is defined in KRS 304.17A-750(3).
(6)
"Insurance purchasing outlet" is defined in KRS 304.17A-750(4).
(7)
"Insurance purchasing outlet member" or "member" is defined
in KRS 304.17A-750(5).
(8)
"Voucher" is defined in 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 office the following:
(a) A completed
Insurance Purchasing Outlet Application for Registration, HIPMC-IPO-1 (7/02);
(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 executive director
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 office:
(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) 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 office shall:
(a) Inform the
applicant if supplemental information is or is not needed:
1. Applicant shall
submit requested information within thirty (30) days; or
2. If requested
information is not provided to the office within thirty (30) days, the office 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 office a change to
the original documentation or information that was submitted to the office for issuance
or renewal of a certificate of registration as follows:
(a) All updated
documentation or information shall be submitted to the office 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 dollars to
pay administrative and other costs associated with carrying out the provision
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 timeframe established in KRS 304.17A-758(4), an annual financial
statement, including an audited financial statement, in accordance with the
HIPMC-IPO-3 (9/02); 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 HIPMC-IPO-2 (9/02). 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) Quarterly,
submit a financial statement, in accordance with the format established in
HIPMC-IPO-4 (9/02).
(3) An insurance
purchasing outlet shall file its financial statements, as required by KRS
304.17A-758, in accordance with Financial Accounting Standards Board
Statements.
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 executive director 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 as specifically stated in 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 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 is terminated. The
insurance purchasing outlet shall notify the member of his 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 office
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 office 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 office 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 office, 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 executive director:
(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 Office
of Insurance, 215 West Main 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 http://doi.ppr.ky.gov/kentucky/
(29 Ky.R. 1446; Am. 1810; eff. 1-16-2003; TAm eff. 8-9-2007.)
