806 KAR 17:450. Insurance purchasing outlet requirements

Link to law: http://www.lrc.ky.gov/kar/806/017/450.htm
Published: 2015

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      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.)