Indiana Code 27-13-34-16. “Net worth” and “uncovered expense” defined; computation of net worth; minimum net worth
(b) For the purposes of computing net worth, the total assets must be reduced by the value assigned to the following intangible assets:
Terms Used In Indiana Code 27-13-34-16
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- enrollee: means an individual who is entitled to limited health services under a contract with an entity authorized to provide or arrange for limited health services under this chapter. See Indiana Code 27-13-34-1
- in writing: include printing, lithographing, or other mode of representing words and letters. See Indiana Code 1-1-4-5
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- limited service health maintenance organization: means a corporation, partnership, limited liability company, or other entity that undertakes to provide or arrange a limited health service on a prepayment basis or other basis. See Indiana Code 27-13-34-4
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- provider: means a physician, a dentist, an optometrist, a health facility, or other person or institution that is licensed or otherwise authorized to deliver or furnish limited health service. See Indiana Code 27-13-34-5
- United States: includes the District of Columbia and the commonwealths, possessions, states in free association with the United States, and the territories. See Indiana Code 1-1-4-5
(2) Going concern value.
(3) Organizational expense.
(4) Start-up costs.
(5) Long term prepayments of deferred charges.
(6) Nonreturnable deposits.
(7) Obligations of officers, directors, owners, or affiliates, except short term obligations of affiliates for goods or services that:
(A) arise in the normal course of business;
(B) are payable on the same terms as equivalent transactions with nonaffiliates; and
(C) are not past due.
(c) As used in this section, “uncovered expense” means the cost of health care services:
(1) that are the obligation of a limited service health maintenance organization;
(2) for which an enrollee may be liable in the event of the insolvency of the organization; and
(3) for which alternative arrangements acceptable to the commissioner have not been made to cover the costs.
(d) For purposes of the definition of “uncovered expense” set forth in subsection (c), costs incurred by a provider who has agreed in writing not to bill enrollees, except for permissible supplemental charges, shall be considered a covered expense.
(e) Each limited service health maintenance organization must, at all times, have and maintain net worth equal to the greater of:
(1) fifty thousand dollars ($50,000); or
(2) two and one-half percent (2.5%) of the annual gross subscription income of the organization, up to a maximum of two hundred fifty thousand dollars ($250,000).
(f) A limited service health maintenance organization shall maintain as a claim or loss reserve, in cash or obligations of the United States government, assets sufficient to discharge all liabilities on all uncovered expenses arising under policies issued.
(g) The commissioner may adopt rules under IC 4-22-2 to further define whether and to what extent the assets of a limited service health maintenance organization may be considered to be admitted assets for the purposes of complying with the requirements of this chapter.
As added by P.L.26-1994, SEC.25.