Michigan Laws 500.3519 – Contract and contract rates; fairness; rate differential; basic health services to large employers required
Current as of: 2023 | Check for updates
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Terms Used In Michigan Laws 500.3519
- Basic health services: means medically necessary health services that health maintenance organizations must offer to large employers in at least 1 health maintenance contract. See Michigan Laws 500.3501
- Contract: A legal written agreement that becomes binding when signed.
- Director: means , unless the context clearly implies a different meaning, the director of the department. See Michigan Laws 500.102
- Health maintenance contract: means a contract between a health maintenance organization and a subscriber or group of subscribers to provide or arrange for the provision of health services within the health maintenance organization's service area. See Michigan Laws 500.3501
- Health maintenance organization: means a person that, among other things, does the following:
(i) Delivers health services that are medically necessary to enrollees under the terms of its health maintenance contract, directly or through contracts with affiliated providers, in exchange for a fixed prepaid sum or per capita prepayment, without regard to the frequency, extent, or kind of health services. See Michigan Laws 500.3501Rate: means the cost of insurance per payroll before adjustment for an individual insured's size, exposure, or loss experience. See Michigan Laws 500.2402 Service area: means a defined geographical area in which covered health services are generally available and readily accessible to enrollees and where health maintenance organizations may market their contracts. See Michigan Laws 500.3501
(1) A health maintenance organization contract and the contract’s rates, including any deductibles, copayments, and coinsurances, between the organization and its subscribers must be fair, sound, and reasonable in relation to the services provided, and the procedures for offering and terminating contracts must not be unfairly discriminatory.
(2) A health maintenance organization contract and the contract’s rates must not discriminate on the basis of race, color, creed, national origin, residence within the approved service area of the health maintenance organization, lawful occupation, sex, handicap, or marital status, except that marital status may be used to classify individuals or risks for the purpose of insuring family units. The director may approve a rate differential based on sex, age, residence, disability, marital status, or lawful occupation, if the differential is supported by sound actuarial principles, a reasonable classification system, and is related to the actual and credible loss statistics or reasonably anticipated experience for new coverages. A healthy lifestyle program as defined in section 3517(2) is not subject to the director’s approval under this subsection and is not required to be supported by sound actuarial principles, a reasonable classification system, or be related to actual and credible loss statistics or reasonably anticipated experience for new coverages.
(3) A health maintenance organization contract shall offer basic health services to large employers in at least 1 health maintenance contract.