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 thischapter.
(b) "Association" means the Indiana comprehensive healthinsurance association established under section 2.1 of this chapter.
(c) "Association policy" means a policy issued by the associationthat provides coverage specified in section 3 of this chapter. Theterm does not include a Medicare supplement policy that is issuedunder section 9 of this chapter.
(d) "Carrier" means an insurer providing medical, hospital, orsurgical expense incurred health insurance policies.
(e) "Church plan" means a plan defined in the federal EmployeeRetirement 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 federalHealth Insurance Portability and Accountability Act of 1996 (26U.S.C. 9801(c)(1)).
(h) "Eligible expenses" means those charges for health careservices and articles provided for in section 3 of this chapter.
(i) "Federal income poverty level" has the meaning set forth inIC 12-15-2-1.
(j) "Federally eligible individual" means an individual:
(1) for whom, as of the date on which the individual seekscoverage under this chapter, the aggregate period of creditablecoverage is at least eighteen (18) months and whose most recentprior 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 theseplans;
(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 SocialSecurity Act; or
(C) a state plan under Title XIX of the federal SocialSecurity Act (or any successor program);
and does not have other health insurance coverage;
(3) with respect to whom the individual's most recent coveragewas not terminated for factors relating to nonpayment ofpremiums or fraud;
(4) who, if after being offered the option of continuationcoverage under the Consolidated Omnibus BudgetReconciliation 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 theprovision or program.
(k) "Governmental plan" means a plan as defined under thefederal Employee Retirement Income Security Act of 1974 (26U.S.C. 414(d)) and any plan established or maintained for itsemployees by the United States government or by any agency orinstrumentality 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 providesmedical care payments to, or on behalf of, employees or theirdependents, as defined under the terms of the plan, directly orthrough insurance, reimbursement, or otherwise.
(m) "Health care facility" means any institution providing healthcare services that is licensed in this state, including institutionsengaged principally in providing services for health maintenanceorganizations or for the diagnosis or treatment of human disease,pain, injury, deformity, or physical condition, including a generalhospital, special hospital, mental hospital, public health center,diagnostic center, treatment center, rehabilitation center, extendedcare facility, skilled nursing home, nursing home, intermediate carefacility, tuberculosis hospital, chronic disease hospital, maternityhospital, outpatient clinic, home health care agency, bioanalyticallaboratory, or central services facility servicing one (1) or more suchinstitutions.
(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 furnishhealth care services.
(p) "Health care services" means any services or productsincluded in the furnishing to any individual of medical care, dentalcare, or hospitalization, or incident to the furnishing of such care orhospitalization, as well as the furnishing to any person of any otherservices or products for the purpose of preventing, alleviating,curing, or healing human illness or injury.
(q) "Health insurance" means hospital, surgical, and medicalexpense incurred policies, nonprofit service plan contracts, healthmaintenance organizations, limited service health maintenanceorganizations, and self-insured plans. However, the term "healthinsurance" does not include short term travel accident policies,accident only policies, fixed indemnity policies, automobile medicalpayment, or incidental coverage issued with or as a supplement toliability insurance.
(r) "Insured" means all individuals who are provided qualifiedcomprehensive health insurance coverage under an individual policy,including all dependents and other insured persons, if any.
(s) "Medicaid" means medical assistance provided by the stateunder 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 anystructure or function of the body;
(2) transportation primarily for and essential to Medicareservices 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 theassociation has determined:
(1) are recommended by a legally qualified physician;
(2) are commonly and customarily recognized throughout thephysician's profession as appropriate in the treatment of thepatient's diagnosed illness; and
(3) are not primarily for the scholastic education or career andtechnical training of the provider or patient.
(v) "Medicare" means Title XVIII of the federal Social SecurityAct (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 whicha policy provides coverage or obligates the carrier to provide healthcare services.
(y) "Health maintenance organization" has the meaning set out inIC 27-13-1-19.
(z) "Resident" means an individual who is:
(1) legally domiciled in Indiana for at least twelve (12) monthsbefore applying for an association policy; or
(2) a federally eligible individual and legally domiciled inIndiana.
(aa) "Self-insurer" means an employer who provides services,payment for, or reimbursement of any part of the cost of health careservices other than payment of insurance premiums or subscribercharges to a carrier. However, the term "self-insurer" does notinclude an employer who is exempt from state insurance regulationby federal law, or an employer who is a political subdivision of thestate of Indiana.
(bb) "Services of a skilled nursing facility" means services thatmust commence within fourteen (14) days following a confinementof at least three (3) consecutive days in a hospital for the samecondition.
(cc) "Skilled nursing facility", "home health agency", "hospital",and "home health services" have the meanings assigned to them in 42U.S.C. 1395x.
(dd) "Medicare supplement policy" means an individual policy ofaccident and sickness insurance that is designed primarily as asupplement to reimbursements under Medicare for the hospital,medical, and surgical expenses of individuals who are eligible forMedicare benefits.
(ee) "Limited service health maintenance organization" has themeaning 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; boardof directors; plan of operation; powers and duties
Sec. 2.1. (a) There is established a nonprofit legal entity to bereferred to as the Indiana comprehensive health insuranceassociation, which must assure that health insurance is madeavailable throughout the year to each eligible Indiana residentapplying to the association for coverage. All carriers, healthmaintenance organizations, limited service health maintenanceorganizations, and self-insurers providing health insurance or healthcare services in Indiana must be members of the association. Theassociation shall operate under a plan of operation established andapproved under subsection (c) and shall exercise its powers througha 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 fromthe members of the association, one (1) of which must be arepresentative of a health maintenance organization.
(2) Two (2) members to be appointed by the commissioner shallbe consumers representing policyholders.
(3) Two (2) members shall be the state budget director ordesignee and the commissioner of the department of insuranceor designee.
(4) One (1) member to be appointed by the commissioner mustbe a representative of health care providers.
The commissioner shall appoint the chairman of the board, and theboard shall elect a secretary from its membership. The term of officeof each appointed member is three (3) years, subject to eligibility forreappointment. Members of the board who are not state employeesmay be reimbursed from the association's funds for expensesincurred in attending meetings. The board shall meet at leastsemiannually, with the first meeting to be held not later than May 15of each year.
(c) The association shall submit to the commissioner a plan ofoperation for the association and any amendments to the plannecessary or suitable to assure the fair, reasonable, and equitableadministration of the association. The plan of operation becomeseffective upon approval in writing by the commissioner consistentwith the date on which the coverage under this chapter must be madeavailable. The commissioner shall, after notice and hearing, approvethe plan of operation if the plan is determined to be suitable to assure
the fair, reasonable, and equitable administration of the associationand provides for the sharing of association losses on an equitable,proportionate basis among the member carriers, health maintenanceorganizations, limited service health maintenance organizations, andself-insurers. If the association fails to submit a suitable plan ofoperation within one hundred eighty (180) days after the appointmentof the board of directors, or at any time thereafter the associationfails to submit suitable amendments to the plan, the commissionershall adopt rules under IC 4-22-2 necessary or advisable toimplement this section. These rules are effective until modified bythe commissioner or superseded by a plan submitted by theassociation and approved by the commissioner. The plan of operationmust:
(1) establish procedures for the handling and accounting ofassets and money of the association;
(2) establish the amount and method of reimbursing membersof the board;
(3) establish regular times and places for meetings of the boardof directors;
(4) establish procedures for records to be kept of all financialtransactions and for the annual fiscal reporting to thecommissioner;
(5) establish procedures whereby selections for the board ofdirectors will be made and submitted to the commissioner forapproval;
(6) contain additional provisions necessary or proper for theexecution of the powers and duties of the association; and
(7) establish procedures for the periodic advertising of thegeneral availability of the health insurance coverages from theassociation.
(d) The plan of operation may provide that any of the powers andduties of the association be delegated to a person who will performfunctions similar to those of this association. A delegation under thissection takes effect only with the approval of both the board ofdirectors and the commissioner. The commissioner may not approvea delegation unless the protections afforded to the insured aresubstantially equivalent to or greater than those provided under thischapter.
(e) The association has the general powers and authorityenumerated by this subsection in accordance with the plan ofoperation approved by the commissioner under subsection (c). Theassociation has the general powers and authority granted under thelaws of Indiana to carriers licensed to transact the kinds of healthcare services or health insurance described in section 1 of thischapter and also has the specific authority to do the following:
(1) Enter into contracts as are necessary or proper to carry outthis 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 forrecovery of any assessments for, on behalf of, or against
participating carriers.
(3) Take legal action necessary to avoid the payment ofimproper claims against the association or the coverageprovided by or through the association.
(4) Establish a medical review committee to determine thereasonably appropriate level and extent of health care servicesin each instance.
(5) Establish appropriate rates, scales of rates, rateclassifications and rating adjustments, such rates not to beunreasonable in relation to the coverage provided and thereasonable operational expenses of the association.
(6) Pool risks among members.
(7) Issue policies of insurance on an indemnity or provision ofservice basis providing the coverage required by this chapter.
(8) Administer separate pools, separate accounts, or other plansor arrangements considered appropriate for separate membersor groups of members.
(9) Operate and administer any combination of plans, pools, orother mechanisms considered appropriate to best accomplishthe fair and equitable operation of the association.
(10) Appoint from among members appropriate legal, actuarial,and other committees as necessary to provide technicalassistance in the operation of the association, policy and othercontract design, and any other function within the authority ofthe association.
(11) Hire an independent consultant.
(12) Develop a method of advising applicants of the availabilityof 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 thischapter.
(15) Subject to section 3 of this chapter, negotiatereimbursement rates and enter into contracts with individualhealth care providers and health care provider groups.
(f) Rates for coverages issued by the association may not beunreasonable in relation to the benefits provided, the risk experience,and the reasonable expenses of providing the coverage. Separatescales of premium rates based on age apply for individual risks.Premium rates must take into consideration the extra morbidity andadministration 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 theaverage premium rate for that class charged by the five (5)carriers with the largest premium volume in the state during thepreceding calendar year for an insured whose family income isless than three hundred fifty-one percent (351%) of the federalincome 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 duringthe preceding calendar year, for an insured whose familyincome is more than three hundred fifty percent (350%) of thefederal income poverty level for the same size family.
In determining the average rate of the five (5) largest carriers, therates charged by the carriers shall be actuarially adjusted todetermine the rate that would have been charged for benefitssubstantially identical to those issued by the association. All ratesadopted by the association must be submitted to the commissionerfor approval.
(g) Following the close of the association's fiscal year, theassociation shall determine the net premiums, the expenses ofadministration, and the incurred losses for the year. Twenty-fivepercent (25%) of any net loss shall be assessed by the association toall members in proportion to their respective shares of total healthinsurance 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 inthe year) coinciding with or ending during the fiscal year of theassociation. Seventy-five percent (75%) of any net loss shall be paidby the state. In sharing losses, the association may abate or defer inany part the assessment of a member, if, in the opinion of the board,payment of the assessment would endanger the ability of the memberto fulfill its contractual obligations. The association may also providefor interim assessments against members of the association ifnecessary to assure the financial capability of the association to meetthe incurred or estimated claims expenses or operating expenses ofthe association until the association's next fiscal year is completed.Net gains, if any, must be held at interest to offset future losses orallocated to reduce future premiums. Assessments must bedetermined 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 thegeneral accuracy of the financial data submitted to the association,and the association shall have an annual audit of its operations by anindependent certified public accountant.
(i) The association is subject to examination by the department ofinsurance under IC 27-1-3.1. The board of directors shall submit, notlater than March 30 of each year, a financial report for the precedingcalendar year in a form approved by the commissioner.
(j) All policy forms issued by the association must conform insubstance to prototype forms developed by the association, must inall other respects conform to the requirements of this chapter, andmust be filed with and approved by the commissioner before theiruse.
(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 thischapter.
(l) The association and the premium collected by the associationshall be exempt from the premium tax, the adjusted gross income tax,or any combination of these upon revenues or income that may beimposed by the state.
(m) Members who, during any calendar year, have paid one (1) ormore assessments levied under this chapter may include in the ratesfor premiums charged for insurance policies to which this chapterapplies amounts sufficient to recoup a sum equal to the amounts paidto the association by the member less any amounts returned to themember insurer by the association, and the rates shall not be deemedexcessive by virtue of including an amount reasonably calculated torecoup assessments paid by the member.
(n) The association shall provide for the option of monthlycollection of premiums.
(o) The association shall periodically certify to the budget agencythe amount necessary to pay seventy-five percent (75%) of any netloss 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 eachyear, 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 memberunder section 2.1 (as in effect December 31, 2004) or 2.4 of thischapter during the previous calendar year. A report certified underthis section to the legislative council must be in an electronic formatunder IC 5-14-6.
(b) A member shall, not later than October 31 of each year, certifyan independently audited report to the association of the amount ofassessments paid by the member against which a tax credit has notbeen taken under section 2.1 (as in effect December 31, 2004) or 2.4of 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, beforeJanuary 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) isnot entitled to claim or carry forward the unused tax credit except asprovided in this section.
(b) A member described in subsection (a) may, for each taxableyear beginning after December 31, 2006, take a credit of not morethan ten percent (10%) of the amount of the assessments paid beforeJanuary 1, 2005, against which a tax credit has not been taken beforeJanuary 1, 2005. A credit under this subsection may be taken againstpremium taxes, adjusted gross income taxes, or any combination ofthese, or similar taxes upon revenues or income of the member thatmay be imposed by the state, up to the amount of the taxes due foreach taxable year.
(c) If the maximum amount of a tax credit determined undersubsection (b) for a taxable year exceeds a member's liability for thetaxes described in subsection (b), the member may carry the unusedportion of the tax credit forward to subsequent taxable years. Taxcredits carried forward under this subsection are not subject to theten percent (10%) limit set forth in subsection (b).
(d) The total amount of credits taken by a member under thissection in all taxable years may not exceed the total amount ofassessments paid by the member before January 1, 2005, minus thetotal amount of tax credits taken by the member under section 2.1 ofthis 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 planof operation.
(b) A member assessment under section 2.1 of this chapter is duenot more than thirty (30) days after the member receives writtennotice of the assessment. A member that pays an assessment after thedue 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 associationwith 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 reviewof the act.
(b) If:
(1) within thirty (30) days after an appeal is filed undersubsection (a), the board of directors has not acted on theappeal; or
(2) a member or health care provider is aggrieved by a finalaction 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 befiled less than thirty (30) days after the:
(1) expiration of the thirty (30) day period specified insubsection (b)(1); or
(2) action or decision specified in subsection (b)(2).
(d) The commissioner shall, not more than forty-five (45) daysafter an appeal is filed under subsection (c), take a final action orissue an order regarding the appeal.
(e) A final action or order of the commissioner on an appeal filedunder this section is subject to judicial review.
(f) If a member or health care provider sues the association, thecourt 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; eligibleexpenses; managed care
Sec. 3. (a) An association policy issued under this chapter maypay an amount for medically necessary eligible expenses related tothe diagnosis or treatment of illness or injury that exceed thedeductible and coinsurance amounts applicable under section 4 ofthis chapter. Payment under an association policy must be based onone (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 effecton January 1, 2004. If payment is based on the usual andcustomary fee schedule in effect on January 1, 2004, the ratesof reimbursement under the fee schedule must be adjustedannually by a percentage equal to the percentage change in theIndiana medical care component of the Consumer Price Indexfor all Urban Consumers, as published by the United StatesBureau of Labor Statistics during the preceding calendar year.
(2) A health care provider network arrangement. If payment isbased on a health care provider network arrangement,reimbursement under an association policy must be madeaccording 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 insuredunder the association policy if the insured obtains healthcare services from a nonnetwork health care provider.
(b) Eligible expenses are the charges for the following health careservices and articles to the extent furnished by a health care providerin an emergency situation or furnished or prescribed by a physician:
(1) Hospital services, including charges for the institution'smost common semiprivate room, and for private room onlywhen medically necessary, but limited to a total of one hundredeighty (180) days in a year.
(2) Professional services for the diagnosis or treatment ofinjuries, 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, andallied health professionals.
(3) The first twenty (20) professional visits for the diagnosis ortreatment of one (1) or more mental conditions rendered duringthe year by one (1) or more physicians or, at their direction, bytheir staff of registered or licensed nurses, and allied healthprofessionals.
(4) Drugs and contraceptive devices requiring a physician'sprescription.
(5) Services of a skilled nursing facility for not more than onehundred 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 nopersonal use in the absence of the condition for whichprescribed.
(12) Diagnostic X-rays and laboratory tests.
(13) Oral surgery for:
(A) excision of partially or completely erupted impactedteeth;
(B) excision of a tooth root without the extraction of theentire tooth; or
(C) the gums and tissues of the mouth when not performedin connection with the extraction or repair of teeth.
(14) Services of a physical therapist and services of a speechtherapist.
(15) Professional ambulance services to the nearest health carefacility 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 thosewho rely upon spiritual means through prayer alone for healing uponsuch conditions, limitations, and requirements as may be determined
by the board of directors.
(c) A managed care organization that issues an association policymay not refuse to enter into an agreement with a hospital solelybecause the hospital has not obtained accreditation from anaccreditation organization that:
(1) establishes standards for the organization and operation ofhospitals;
(2) requires the hospital to undergo a survey process for a feepaid by the hospital; and
(3) was organized and formed in 1951.
(d) This section does not prohibit a managed care organizationfrom 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 thehospital to evaluate performance.
(e) For purposes of this section, if benefits are provided in theform of services rather than cash payments, their value shall bedetermined on the basis of their monetary equivalency.
(f) The following are not eligible expenses in any associationpolicy within the scope of this chapter:
(1) Services for which a charge is not made in the absence ofinsurance or for which there is no legal obligation on the part ofthe patient to pay.
(2) Services and charges made for benefits provided under thelaws of the United States, including Medicare and Medicaid,military service connected disabilities, medical servicesprovided for members of the armed forces and their dependentsor for employees of the armed forces of the United States,medical services financed in the future on behalf of all citizensby the United States.
(3) Benefits which would duplicate the provision of services orpayment of charges for any care for injury or disease either:
(A) arising out of and in the course of an employmentsubject to a worker's compensation or similar law; or
(B) for which benefits are payable without regard to faultunder a coverage statutorily required to be contained in anymotor vehicle or other liability insurance policy orequivalent self-insurance.
However, this subdivision does not authorize exclusion ofcharges that exceed the benefits payable under the applicableworker's compensation or no-fault coverage.
(4) Care which is primarily for a custodial or domiciliarypurpose.
(5) Cosmetic surgery unless provided as a result of an injury ormedically necessary surgical procedure.
(6) Any charge for services or articles the provision of which isnot within the scope of the license or certificate of theinstitution or individual rendering the services.
(g) The coverage and benefit requirements of this section forassociation policies may not be altered by any other inconsistent state
law without specific reference to this chapter indicating a legislativeintent to add or delete from the coverage requirements of thischapter.
(h) This chapter does not prohibit the association from issuingadditional types of health insurance policies with different types ofbenefits that, in the opinion of the board of directors, may be ofbenefit to the citizens of Indiana.
(i) This chapter does not prohibit the association or itsadministrator from implementing uniform procedures to review themedical necessity and cost effectiveness of proposed treatment,confinement, tests, or other medical procedures. Those proceduresmay take the form of preadmission review for nonemergencyhospitalization, case management review to verify that coveredindividuals are aware of treatment alternatives, or other forms ofutilization review. Any cost containment techniques of this type mustbe adopted by the board of directors and approved by thecommissioner.
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 healthcare provider shall not bill an insured for any amount that exceeds:
(1) the payment made by the association under the associationpolicy for eligible expenses incurred by the insured; and
(2) any copayment, deductible, or coinsurance amountsapplicable 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 andpharmaceutical management programs based on:
(A) an analysis of the highest cost health care servicescovered under association policies;
(B) a review of chronic disease management andpharmaceutical management programs used in populationssimilar to insureds; and
(C) a determination of the chronic disease management andpharmaceutical management programs expected to bestimprove health outcomes in a cost effective manner;
(2) consider recommendations of the drug utilization reviewboard established by IC 12-15-35-19 concerning chronic diseasemanagement and pharmaceutical management programs;
(3) when practicable, coordinate programs adopted under thissection with comparable programs implemented by the state;and (4) implement a copayment structure for prescription drugscovered under an association policy.
(b) A program approved and implemented under this section maynot require prior authorization for a prescription drug that isprescribed for the treatment of:
(1) human immunodeficiency virus (HIV) or acquired immunedeficiency syndrome (AIDS) and is included on the AIDS drugassistance program formulary adopted by the state departmentof 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 Availabilityof the United States Department of Health and HumanServices; or
(B) Medical and Scientific Advisory Council of the NationalHemophilia 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 isavailable is considered to be approved by the association under thissection.
(e) An insured who has a chronic disease for which at least one(1) chronic disease management program is approved under thissection shall participate in an approved chronic disease managementprogram for the chronic disease as a condition of coverage oftreatment 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 Internetbased pharmacy (as defined in IC 25-26-18-1) through which aninsured may obtain prescription drugs covered under an associationpolicy.
(b) A prescription drug that is covered under an association policyis 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 asa 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 pharmacydescribed in subsection (b) will sell the prescription drug, with theremainder of the charge for the prescription drug to be paid by theinsured.
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), anassociation policy offered in accordance with this chapter mustimpose a five hundred dollar ($500) deductible on a per person perpolicy year basis. The deductible must be applied to the first fivehundred dollars ($500) of eligible expenses incurred by the coveredperson.
(b) Subject to the limitation provided in subsection (c), amandatory coinsurance requirement shall be imposed at the rate oftwenty percent (20%) of eligible expenses in excess of the mandatorydeductible.
(c) The maximum aggregate out-of-pocket payments for eligibleexpenses by the insured in the form of deductibles and coinsurancemay not exceed one thousand five hundred dollars ($1,500) perindividual 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; preexistingconditions
Sec. 5.1. (a) A person is not eligible for an association policy ifthe person is eligible for Medicaid. A person other than a federallyeligible individual may not apply for an association policy unless theperson has applied for Medicaid not more than sixty (60) days beforeapplying for the association policy.
(b) Except as provided in subsection (c), a person is not eligiblefor an association policy if, at the effective date of coverage, theperson has or is eligible for coverage under any insurance plan thatequals or exceeds the minimum requirements for accident andsickness 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) (expiredJuly 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 notaffect an individual's eligibility for an association policy under thissubsection. Coverage under any association policy is in excess of,and may not duplicate, coverage under any other form of healthinsurance.
(c) Except as provided in IC 27-13-16-4 and subsection (a), aperson is eligible for an association policy upon a showing that:
(1) the person has been rejected by one (1) carrier for coverageunder any insurance plan that equals or exceeds the minimumrequirements for accident and sickness insurance policies issuedin Indiana, as set forth in IC 27, without material underwriting
restrictions;
(2) an insurer has refused to issue insurance except at a rateexceeding the association plan rate; or
(3) the person is a federally eligible individual.
For the purposes of this subsection, eligibility for Medicare coveragedoes not disqualify a person who is less than sixty-five (65) years ofage 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 residentof Indiana.
(2) On the date on which an insured requests cancellation of theassociation policy.
(3) On the date of the death of an insured.
(4) At the end of the policy period for which the premium hasbeen paid.
(5) On the first date on which the insured no longer meets theeligibility requirements under this section.
(e) An association policy must provide that coverage of adependent unmarried child terminates when the child becomesnineteen (19) years of age (or twenty-five (25) years of age if thechild is enrolled full time in an accredited educational institution).The policy must also provide in substance that attainment of thelimiting age does not operate to terminate a dependent unmarriedchild's coverage while the dependent is and continues to be both:
(1) incapable of self-sustaining employment by reason ofmental retardation or mental or physical disability; and
(2) chiefly dependent upon the person in whose name thecontract is issued for support and maintenance.
However, proof of such incapacity and dependency must befurnished to the carrier within one hundred twenty (120) days of thechild's attainment of the limiting age, and subsequently as may berequired by the carrier, but not more frequently than annually afterthe two (2) year period following the child's attainment of thelimiting age.
(f) An association policy that provides coverage for a familymember of the person in whose name the contract is issued must, asto the family member's coverage, also provide that the healthinsurance benefits applicable for children are payable with respect toa newly born child of the person in whose name the contract is issuedfrom the moment of birth. The coverage for newly born childrenmust consist of coverage of injury or illness, including the necessarycare and treatment of medically diagnosed congenital defects andbirth abnormalities. If payment of a specific premium is required toprovide coverage for the child, the contract may require thatnotification of the birth of a child and payment of the requiredpremium must be furnished to the carrier within thirty-one (31) daysafter the date of birth in order to have the coverage continued beyondthe thirty-one (31) day period.
(g) Except as provided in subsection (h), an association policymay contain provisions under which coverage is excluded during a
period of three (3) months following the effective date of coverageas to a given covered individual for preexisting conditions, as longas medical advice or treatment was recommended or received withina period of three (3) months before the effective date of coverage.This subsection may not be construed to prohibit preexistingcondition provisions in an insurance policy that are more favorableto the insured.
(h) If a person applies for an association policy within six (6)months after termination of the person's coverage under a healthinsurance arrangement and the person meets the eligibilityrequirements of subsection (c), then an association policy may notcontain provisions under which:
(1) coverage as to a given individual is delayed to a date afterthe 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 maynot be construed to prohibit preexisting condition provisions in aninsurance policy that are more favorable to the insured.
(i) For purposes of this section, coverage under a health insurancearrangement includes, but is not limited to, coverage pursuant to theConsolidated 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 upondeath of policyholder
Sec. 6. (a) An association policy offered under this chapter mustcontain provisions under which the association is obligated to renewthe contract until:
(1) the date on which coverage terminates under section 5.1 ofthis chapter; or
(2) the day on which the individual in whose name the contractis issued first becomes eligible for Medicare coverage, exceptthat in a family policy covering both husband and wife, the ageof the younger spouse must be used as the basis for meeting thedurational requirement of this subdivision.
(b) The association may not change the rates for associationpolicies or Medicare supplement policies except on a class basis witha clear disclosure in the policy of the association's right to do so.
(c) An association policy offered under this chapter must providethat upon the death of the individual in whose name the contract isissued, every other individual then covered under the contract mayelect, within a period specified in the contract, to continue coverageunder the same or a different contract until such time as he wouldhave 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 ofinsurance 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 theassociation, the establishment of rates, forms, or procedures forcoverages issued by the association, nor any joint or collective actionrequired by this chapter shall be the basis of any legal action, civil,or criminal liability against the association or members of it eitherjointly 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 supplementpolicies 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 thecommissioner under IC 27-8-13-10.1; and
(2) must meet the standards for Medicare supplement policybenefits established under IC 27-8-13-10.1.
(c) A Medicare supplement policy issued under this section is notsubject to the deductible and coinsurance requirements and theeligibility restrictions applying to association policies under sections4 and 5.1 of this chapter. However, the association may provide thatan individual is not eligible for a Medicare supplement policy issuedunder this section unless the individual has applied to one (1) carrierfor a Medicare supplement policy and the application of theindividual 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 theassociation shall establish eligibility guidelines for the issuance of anassociation 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 welfarebenefit 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 effectivedate of a diagnostic or procedure code described in this subsection:
(1) the association shall begin using the most current version ofthe:
(A) current procedural terminology (CPT);
(B) international classification of diseases (ICD);
(C) American Psychiatric Association's Diagnostic andStatistical 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 servicesprovided under an association policy; and
(2) a health care provider shall begin using the most currentversion of the:
(A) current procedural terminology (CPT);
(B) international classification of diseases (ICD);
(C) American Psychiatric Association's Diagnostic andStatistical 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 forpayment for services provided under an association policy.
(b) If a health care provider provides services that are coveredunder an association policy:
(1) after the effective date of the most current version of adiagnostic or procedure code described in subsection (a); and
(2) before the association begins using the most current versionof the diagnostic or procedure code;
the association shall reimburse the health care provider under theversion of the diagnostic or procedure code that was in effect on thedate 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.)