CHAPTER Ins 3400 PURCHASING ALLIANCES
Statutory Authority: RSA 420-G:10-a
PART Ins 3401 PURCHASING
Ins
3401.01 Purpose. The purpose of this part is to:
(a) Increase the affordability, efficiency, and
fairness of health insurance coverage for small employers by setting standards
for the licensure and oversight of voluntary purchasing alliances through which
small employers and their employees may purchase health coverage in the manner
of large employer groups;
(b) Allow small employers and their employees to
obtain better value in purchasing health insurance by consolidating purchasing
responsibilities and resources, thereby increasing bargaining power and
purchasing expertise and reducing the administrative cost of health plan
contracting, enrollment, premium collection and payment for multiple employers;
(c) Provide small employers and their employees a
choice of health carrier or carriers and health benefit plan or plans through an
open and fair process in which qualified carriers compete to provide health
coverage to alliance members; and
(d) Foster competition based on value.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins 3401.02 Definitions.
(a) "Commissioner" means the insurance
commissioner.
(b) "Eligible dependent" means
"eligible dependents" as defined in RSA 420-G:2, V.
(c) "Eligible employee" means
"eligible employees" as defined in RSA 420-G:2, VI.
(d) "Employee enrollee" means an
eligible employee, self-employed individual or an eligible dependent of an
eligible employee who is enrolled in a health benefit plan offered through an
alliance by a participating carrier.
(e) "Health benefit plan" means
"health coverage" as defined in RSA 420-G:2, IX.
(f) "Health carrier" means "health
carrier" as defined in RSA 420-G:2, VIII.
(g) "Member small employer" means a small
employer who enrolls in an alliance.
(h) "Participating carrier" means a
carrier having a contractual relationship with an alliance.
(i) "Purchasing alliance" means a
corporation or other entity licensed pursuant to RSA 420-G:10-a that provides,
on a voluntary basis, health insurance coverage through a participating carrier
or carriers to member small employers and their employees within a defined
service area authorized by the commissioner.
(j) "Small employer" means "small
employer" as defined in RSA 420-G:2, XVI.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins 3401.03 Jurisdiction of the Commissioner;
Penalties.
(a) The commissioner shall regulate the
establishment and conduct of purchasing alliances.
(b) No person or entity may market, sell, offer,
or arrange for a package of one or more health benefit plans underwritten by a
participating carrier or carriers to
2 or more small employers or their eligible employees without first being
licensed by the commissioner pursuant to this part.
(c) A person or entity not licensed by the
commissioner as a purchasing alliance and engaged in the purchase, sale,
marketing or distribution of health insurance or heath care benefit plans shall
not hold itself out as an alliance, health insurance purchasing alliance,
purchasing alliance, health insurance purchasing cooperative or purchasing
cooperative or otherwise use a confusingly similar name.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins
3401.04 Purchasing
(a) An application shall be completed and filed
with the commissioner by an authorized representative of the corporation or
other entity established as a precursor to being granted a purchasing alliance
license. An application shall not be
deemed filed until all information necessary to properly process the
application has been received by the commissioner. Upon filing, the
commissioner shall make a determination concerning the application and shall
provide notice of the determination to the applicant. If approved, a copy of a license shall be
provided to the purchasing alliance. The license shall serve as authorization
to operate pursuant to this part.
(b) Each applicant shall prepare a business plan
as follows:
(1) The business
plan shall include, but not be limited to, the following information:
a. A detailed,
written plan of operations explaining how the applicant intends to fulfill the
purposes and requirements of this part.
b. A written
commitment by the alliance;
c. The specific
steps planned to increase affordability, efficiency and fairness of health
insurance coverage;
d. The specific
steps planned to allow small employers and their employees to obtain health insurance
that is a better value to them than what is otherwise available;
e. The
specific steps planned to provide small employers and their employees
meaningful choice of health carriers and health benefit plans, and foster
competition based on value;
f. The scope of service to be offered in the
proposed service area and the resources and expertise to be used to implement
and administer those services;
g. A provision
requiring that any coverage procured by the alliance shall include a provision
requiring that the members of the alliance be notified directly by the insurer
of cancellation due to nonpayment of premium;
h. The personal
biographical information and descriptions of the officers of the alliance;
i. A written
statement demonstrating that those involved in the operation of the alliance
have the expertise and experience to effectively and professionally represent
small employers and their eligible employees in a fiduciary capacity; and
j. A
affirmative demonstration that financial controls are in place as a condition
of licensure; and
(2) Proposed
substantive changes in the policy or operations of the business plan shall not
take effect without approval from the commissioner.
(c) Each applicant shall file
with the commissioner the following information or documents:
(1) A business
plan;
(2) A plan that
affirmatively demonstrates that the alliance has the technical expertise and
capacity to serve a significant group of small employers and their eligible employees
over the service area;
(3) A plan that
demonstrates that the alliance has the technical capacity to provide service
quality throughout the entire service area;
(4) The
applicant’s articles of incorporation, bylaws or other formation and business
operation documents;
(5) A list of
officers and directors of the applicant and the contract administrator, if one
is employed, and personal biographical information or firm descriptions for
each;
(6) Evidence of
security and prudence in the accounting, deposit, collection, handling, and
transfer of moneys;
(7) A
description of the service area in which the alliance will be marketing and
offering services; and
(8) An annual
report that shows:
a. The alliance
is operating in a sound financial fashion;
b. The alliance
is not a risk-bearing entity and obtains insurance to cover its member; and
c. The alliance
is utilizing sound financial controls and money management.
(d) The commissioner shall approve all
assessments made upon member small employers by the alliance for costs incurred
or anticipated in connection with the operation of the alliance.
(e) The following acts shall constitute a basis
for denial, non-renewal or suspension of
an application or existing license, following notice and an opportunity for
hearing: If the acts are intentional,
they shall constitute a basis for revocation, after notice and hearing.
(1) Failure to
comply with the provisions of RSA 420-G;
(2) Failure to
comply with the business plan filed and approved by the commissioner;
(3) Failure to
maintain adequate financial controls;
(4) Failure to
extend alliance health benefit plan coverage to eligible employees;
(5) Failure to
comply with a lawful order of the commissioner;
(6) Engaging in
an unfair or deceptive act or practice;
(7) Filing any
necessary form, including the application form, with the commissioner that
contains false or materially incorrect information or omissions; or
(8)
Misappropriation, conversion, illegal withholding, or refusal to pay
over upon proper demand any moneys that belong to a person or participating
carrier and that have been entrusted to the alliance in its fiduciary capacity.
(f) The commissioner
shall require the removal and replacement of managerial or marketing staff or
third party contractors if necessary to remedy compliance or performance
problems.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins
3401.05 Powers and Duties of and
Restrictions on Purchasing Alliances.
(a) A purchasing alliance shall:
(1) Offer
health benefit plans that are available to all small employers in the
alliance’s service area;
(2) Establish
administrative and accounting procedures for operating the alliance, for
providing services to member small employers and enrollees and for preparing an
annual budget;
(3) Establish
conditions of participation for small employers that conform to the
requirements of this part and RSA 420-G and include, but are not limited to,
the following:
a. Assurances
that the member small employer is a valid small employer group and is not formed
for the purpose of securing health benefits coverage; and
b. Prepayment
of premiums or other mechanisms to assure that payment will be made for
coverage;
(4) Provide
that each eligible employee is permitted to enroll in any health benefit plan offered
by the participating carrier or carriers so long as the health benefit plan
provides coverage where he or she works or lives;
(5) Establish
conditions of participation for the participating carrier or carriers;
(6) Establish conditions
of participation for producers;
(7) Place into
its contracts between the alliance and member small employers the following:
a. A provision
stating that, for administrative purposes, the alliance shall be the
policyholder or contract holder of the health benefit plan on behalf of member
small employers, their eligible employees and eligible dependents; and
b. A provision
stating that the participating carrier shall issue a certificate of coverage,
or equivalent document, specifying the essential features of the health benefit
plan's coverage to each enrolled eligible employee.
(8) Transmit
enrollment and eligibility information to the participating carrier or carriers
on a timely basis;
(9) Maintain a
trust account or accounts for deposit of all moneys received and collected for
the operation of the alliance;
(10) The
alliance, its board members, employees and agents shall have a fiduciary duty
with respect to all moneys received or owed to it to assure payments of its
obligations and a full accounting to its members and the commissioner; and
(11) Assure the
offering of the same premiums and prices on negotiated health care coverage to
all member classes equally, and treat all members within a class equally with
regard to membership and administrative fees and benefits of membership;
(b) A purchasing alliance may:
(1) Receive,
review, and act on grievances against participating carriers by member small
employers or enrollees;
(2) Undertake
any activity necessary to administer the alliance, including marketing and
publicizing the alliance, and assuring that the participating carrier or
carriers, contractors, participating small employers, and enrollees are in
compliance with alliance requirements;
(3) Establish contracts
with the participating carrier or carriers to provide health coverage to
alliance members;
(4) Establish
contracts with small employer members;
(5) Contract
with qualified, independent third parties for services necessary to carry out
the powers and duties of the alliance;
(6) Enter into
all other contracts as are necessary to carry out the powers and duties of the
alliance;
(7) Appoint a
beneficiary advisory council to evaluate alliance functions and the performance
of the participating carrier or carriers in order to assess the efficacy of the
operations for member small employers and enrollees;
(8) Appoint
advisory committees, as necessary, to provide technical assistance in the
operation of the program and in carrying out the purposes of this part;
(9) Assess
member small employers a fee for costs incurred or anticipated in connection
with the operation of the alliance;
(10) Require as
a condition of membership that all employers include all their eligible
employees or a minimum percentage of employees in coverage purchased through
the alliance;
(11) Require an
employer that makes a membership application to the purchasing alliance that
would entail enrolling fewer than 100 percent of the employer’s eligible
employees or dependents to demonstrate that the enrollment section is based on
factors other than risk selection;
(12) Reject or
allow a carrier to reject an employer from membership, or drop or allow a carrier to drop a member
small employer, if the member fails to
pay premiums or engages in fraud or material misrepresentation in connection
with a health benefit plan purchased through the alliance;
(13) Contract
with licensed insurance producers to market and service coverage made available
through the alliance to its members. Compensation for producers shall not vary
based on the actual or expected health status or medical utilization of the
group to which coverage is sold;
(14) Define a set
of standardized health benefit plans which the alliance shall contract to
purchase from the participating carrier or carriers;
(15) Exclude a
carrier or freeze enrollment in a carrier for failure to achieve established
quality, access or information reporting standards of the alliance;
(16) Require
that member employers and their eligible employees continue to pay
administrative fees that are part of the contract with the alliance if a member
employer or enrollee cancels prior to completion of a contract period;
(17) Negotiate
with the participating carrier or carriers the premium rates charged for
coverage offered through the alliance consistent with the rating restrictions
contained in RSA 420-G;
(18) Request
such information from the participating carrier or carriers as is necessary to
carry out the powers and duties of this part;
(19) Sue or be
sued, including taking action necessary for securing legal remedies on behalf
of the alliance, member small employers, or enrollees;
(20) Apply for
loans or loan guarantees from the
(21) Receive
and accept loans, grants, funds, or anything of value from a public or private
entity including:
a. Employer
premiums;
b. Employer
participation fees;
c. Employer
late fees;
d. Employer
reinstatement fees;
e. Producer
fees paid by the employer;
f. Interest
earned on accounts;
g. Funds paid by
the participating carrier or carriers for a pooled marketing effort;
h. Public
sector and private sector grants, gifts, loans or donations; or
i. Other lawful
sources;
(22) The
alliance may also receive and accept contributions of property, labor, or any
other thing of value;
(23) Expend
funds to pay:
a. The
participating carrier or carriers under their contracts;
b. Third
parties for services provided under contract;
c. Employer
billing adjustments;
d. Producer
fees;
e The alliance’s
administrative expenses; and
f. All other
expenditures duly authorized by the board;
(24) Develop
standard enrollment procedures for enrolling small employers and their eligible
employees and dependents;
(25) Establish
procedures for annual or rolling open enrollment periods;
(26) Establish
procedures and mechanisms for billing and collection of premiums from member
small employers, including any share of the premium paid by employee enrollees;
(27) Develop
model contracts which detail for potential contractors the requirements of the
alliance and provide a copy of the contract to interested carriers;
(28) Develop
and make available a list of objective criteria that shall be met by the
participating carrier or carriers in order to be eligible to participate in the
alliance;
(29) Provide to
alliance members clear, standardized information on each participating carrier
or carriers and the qualified health benefit plans offered by each
participating carrier or carriers, including information on:
a. Price;
b. Benefits;
c. Enrollee
costs;
d. Quality;
e. Patient
satisfaction;
f. Enrollment;
and
g. Grievance
procedures and rights and responsibilities.
(30) Provide qualified
health benefit plan comparison sheets to participating members and their
employees with information regarding coverage that may be obtained through the
participating carrier or carriers;
(31) Require
the participating carrier or carriers to maintain health care data;
(32) Specify in
contracts with the participating carrier or carriers how all premiums shall be
transmitted and the frequency of that transmission and how penalties and grace
periods on late payments of premiums shall be calculated;
(33) Review
information and recommendations from consumers, employers, participating
carriers or health care providers and other sources and, issue periodic reports
or recommendations to the commissioner to improve the delivery of health
services and the purchasing of health coverage; and
(34) Exercise
all powers reasonably necessary to carry out the powers granted and duties imposed under this part.
(c) A purchasing alliance shall not:
(1) Purchase
health care services, assume risk for the cost or provision of health care
services, or otherwise contract with health care providers for the provision of
health care services to enrollees;
(2) Exclude
from membership in the alliance a small employer, eligible employee or eligible
dependent of an eligible employee who is in the service area of the alliance
and who agrees to pay fees for membership and the premium for health coverage
through the alliance and who abides by the bylaws and rules of the alliance;
(3) Prohibit
the participation of small employers, or differentiate classes of membership,
based on industry type, experience, gender, family status, education, health
status, income, or other means in conflict with the rating methodology
specified in RSA 420-G:4;
(4) Charge a
fee not directly related to the operation of the alliance or for non-health
coverage related activities;
(5) As a
condition of membership, require a small employer, eligible employee, or
eligible dependent to subscribe to limited health coverage or non-health
coverage related products or services;
(6) Engage in
any competitive act or practice that results in the selection of member small
employers and enrollees based on industry type, experience, gender, family
status, education, health status, income, small employer size, or other factors
in conflict with the rating methodology specified in RSA 420-G:4; or
(7) Require or
take any action inconsistent or in conflict with state laws or rules.
(d) The contracts entered into by the alliance
shall:
(1) Establish
performance standards for specific contractual elements;
(2) Set
liquidated damages for breach of the contract;
(3) Require the participating carrier or carriers to
notify the member small employer of cancellation of the policy;
(4) Require the
member small employer in the event of cancellation to arrange for continuation
and conversion coverage for its employees to the extent provided under federal
and state law; and
(5) Contain a provision
stating that if after timely receipt of the premium payment from the employer,
the alliance fails to make the premium payment to the insurer, with the result
that coverage is terminated, that the alliance shall be liable for benefits to
the same extent as the insurer or carrier would have been liable if coverage
had not been terminated.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins 3401.06 Requirements for Participating Carriers.
(a) To qualify as a participating carrier, a
carrier shall demonstrate all the following operating characteristics:
(1) That it is
licensed and in good standing with the department of insurance;
(2) That it has the ability to administer health
coverage, to provide adequate service, and to comply with all contractual
requirements of the alliance;
(3) That it has
the ability to provide enrollees with access to covered services;
(4) That it has
the ability to provide coverage for enrollees in any service area in which the
carrier plans to participate through the alliance;
(5) That it has
the ability to arrange and pay for quality health care services;
(6) That it has
the ability to provide standard data required by the alliance, in a manner
prescribed by the alliance, including information on:
a. Plan
performance;
b. Enrollee
satisfaction;
c. Provider
payment and incentive structures;
d. Such other standard
surveys prescribed by the alliance; and
e. Meeting
satisfaction measures established by the alliance;
(7) That it has
the ability to meet quality of care standards established by government and
industry authorities;
(8) That it is
financially strong and has competent management;
(9) That it has
a procedure in place to address
enrollee grievances and appeals; and
(10) That it
has the ability to achieve satisfactory enrollment levels within the service
area in which the carrier is licensed.
(b) In evaluating the requirements for a
participating carrier, the alliance shall consider:
(1) The minimum
geographic service area and participation requirements, maximum thresholds for
premium rates, and standards for determining whether a carrier operates
efficiently;
(2) The ability
of a carrier to provide high quality services within a service area;
(3) Pricing and
the competitiveness of each bid from a carrier; and
(4) The effect of
contracting with additional carriers on the administrative costs of the
alliance and member small employers, the efficiency of the alliance, and the
competitiveness of the premiums that will be paid to the participating carrier
or carriers;
(c) A participating carrier or carriers that
contract with or employ health care providers shall have mechanisms to
accomplish all of the following, in a manner satisfactory to the alliance:
(1) Review the
quality of care covered;
(2) Review the
appropriateness of care covered; and
(3) Provide
accessible health care services;
(d) Each participating carrier shall:
(1) Meet the
standards established by the alliance pursuant to this part;
(2) Provide
data and information as required by the alliance;
(3) Comply with
all laws and rules regarding underwriting, rating, claims handling, sales,
solicitation, licensing, fair marketing, unfair trade practices, the provisions
of this part, and other applicable state statutes;
(4) Enroll and terminate
individuals in the manner specified by the alliance; and
(5) Comply with
other requirements established by the alliance pursuant to this part;
(e) Nothing in this part shall prohibit the
participating carrier or carriers from contracting with particular health care
providers or types, classes, or categories of health care providers, or setting
reimbursement methodology.
(f) A participating carrier or carriers
contracting to provide one or more such benefit plans through the alliance
shall be deemed to be in compliance with the guaranteed issue and renewal
requirements in RSA 420-G:6, III with respect to such benefit plan or plans so
long as it actively markets, issues, and renews such plan or plans to all
eligible employees of all member small employers of the alliance.
(g) In the event that the participating carrier
or carriers elect to terminate its or their contracts with the alliance, the
participating carrier or carriers shall:
(1) Provide
advance notice of its or their decision to the alliance; and
(2) Provide
notice of the decision at least 180 days prior to the non-renewal of health
coverage to the member small employers and employee enrollees.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins 3401.07 Marketing Health Benefit Plans.
(a) The alliance shall establish marketing
standards for use by the participating carrier or carriers.
(b) Any marketing, advertisement, or educational
material for health coverage sold through the alliance shall be approved by the
alliance prior to its use. The alliance shall review all materials submitted to
it and the materials shall be deemed approved if not disapproved within 30
days. The alliance may, through its contracts with the participating carrier or
carriers, deem certain classes of materials to be approved.
(c) The alliance shall make approved marketing
materials available to member small employers in an efficient and standardized
manner. These materials shall include, but not be limited to, an accurate
summary of benefit plans, rates, cost, and accreditation information relating
to the offerings of the participating carrier or carriers.
(d) This section shall not be construed to
prohibit or to compel the alliance or a participating carrier from using the
services of a producer.
(e) The participating carrier or carriers,
contract administrator or producer
of the participating carrier or carriers, or independent insurance producer
shall not engage, directly or indirectly, in an activity or marketing practice
that would encourage member small employers or eligible employees to:
(1) Refrain
from enrolling in a health benefit plan offered through the alliance because of
their health status or claims experience;
(2) Seek
coverage from other participating carriers because of their health status or
claims experience; or
(3) Enroll or
fail to enroll in the alliance because of their health status or claims
experience.
(f)
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins
3401.08 Risk Adjustment Mechanism. In order to reduce the incentive for risk
selection and to improve fairness and efficiency, and in the absence of a risk
adjustment mechanism established by rule or order for the entire small group
market, an alliance may establish a payment mechanism to adjust payments to the
participating carrier or carriers prospectively or retrospectively based on the
amount of risk covered by each participating carrier. To establish such a
mechanism, the alliance may appoint an advisory committee composed of
individuals that have risk adjustment and actuarial expertise to help establish
the risk adjusters.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins
3401.09 Conflict of Interest. No officer or board member or director or
contract administrator of a purchasing alliance or members of their households
may be employed by, be a consultant for, be a member of the board of directors
of, or be affiliated with, or otherwise be a representative of a carrier or
other insurer. This provision shall not preclude an officer or board member or
director or contract administrator of a purchasing alliance from purchasing
health coverage through the alliance.
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins
3401.10 Purchasing
Source. #7434, INTERIM, eff 2-1-01, EXPIRED: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
Ins 3401.11 Purchasing
(a) Purchasing alliances shall submit an annual
evaluation to the commissioner which includes the following:
(1) The
progress achieved in making affordable health care coverage available to
employees of member small employers;
(2) The
progress achieved in assuring choice of health carriers and health care
coverage to employees of member small employers;.
(3) The need,
if any, for financial incentives or other mechanisms to increase participation
in the alliance; and
(4) Other changes
in the law or procedure needed to accomplish the purposes set out in Ins
3401.01.
Source. #7434, INTERIM, eff 2-1-01, EXPIRES: 7-31-01
New. #7583, eff 11-1-01; ss by #9564, eff 10-19-09
APPENDIX
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STATUTE |
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Ins 3401.01-Ins 3401.11 |
RSA 400-A:15, |
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