Sec. 3561.
A health maintenance organization shall have a plan for handling insolvency that allows for continuation of benefits for the duration of the health maintenance contract period for which premiums have been paid and continuation of benefits to any enrollee who is confined on the date of insolvency in an inpatient facility until his or her discharge from the facility. Continuation of benefits in the event of insolvency is satisfied if the health maintenance organization has at least 1 of the following, as approved by the director:
(a) A financial guarantee contract insured by a surety bond issued by an independent insurer with a secure rating from a rating agency that meets the requirements of section 436a(1)(p).
(b) A reinsurance contract issued by an authorized or eligible insurer to cover the expenses to be paid for continued benefits after an insolvency.
(c) A contract between the health maintenance organization and its affiliated providers that provides for the continuation of provider services in the event of the health maintenance organization's insolvency. A health maintenance organization shall include in a contract under this subdivision a mechanism for appropriate sharing by the health maintenance organization of the continuation of provider services as approved by the director and shall not include a provision that continuation of provider services is solely the responsibility of the affiliated providers.
(d) An irrevocable letter of credit.
(e) An insolvency reserve account established with a federal or state chartered financial institution under a trust indenture acceptable to the director for the sole benefit of subscribers and enrollees, equal to 3 months' premium income.
History: Add. 2000, Act 252, Imd. Eff. June 29, 2000 ;-- Am. 2016, Act 276, Imd. Eff. July 1, 2016 Popular Name: Act 218Popular Name: HMO
Structure Michigan Compiled Laws
Chapter 500 - Insurance Code of 1956
Act 218 of 1956 - The Insurance Code of 1956 (500.100 - 500.8302)
218-1956-35 - Chapter 35 Health Maintenance Organizations (500.3501...500.3580)
Section 500.3501 - Definitions.
Section 500.3503 - Applicability of Provisions to Health Maintenance Organization.
Section 500.3505 - Health Maintenance Contract; Use of Descriptive Words; Restrictions.
Section 500.3508 - Quality Assessment Program; Quality Improvement Program.
Section 500.3509 - Certificate of Authority; Application; Form; Limitation; Change of Service Area.
Section 500.3511 - Governing Body; Election of Enrollee Board Members; Requirements; Meetings.
Section 500.3521 - Prepayment Rates; Filing and Approval of Methodology; Schedule.
Section 500.3523 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3527 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3535 - Solicitation or Advertising.
Section 500.3537 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3539 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3541 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3542 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3543 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3544 - Noninsured Benefit Plan; Processing and Payment of Claims.
Section 500.3545 - Acquisition of Obligations From Another Managed Care Entity.
Section 500.3548 - Maintenance of Books, Records, Files, and Financial Records; Funds and Assets.
Section 500.3549 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3551 - Health Maintenance Organization; Net Worth.
Section 500.3553 - Certificate of Authority; Deposit Requirements.
Section 500.3555 - Financial Plan.
Section 500.3557 - Notice of Changes in Operations.
Section 500.3561 - Insolvency; Continuation of Benefits.
Section 500.3565 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3567 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.
Section 500.3569 - Assumption of Financial Risk.
Section 500.3571 - State or Federal Health Programs.
Section 500.3580 - Repealed. 2016, Act 276, Imd. Eff. July 1, 2016.