A plan that provides health care services to low income individuals on a prepaid basis shall not be deemed to be insurance within § 56-7-101, or a service plan or corporation or health maintenance organization within chapters 27-32 of this title, or any other provision of this title; provided, that the plan meets the following conditions:

(1) Eligibility in the plan is limited to persons employed in businesses employing two hundred (200) eligible persons or fewer and persons engaged in domestic service in private households and dependents of those persons, where the persons earn less than two hundred percent (200%) of the federal poverty level and are not covered under any other group insurance arrangement;

Terms Used In Tennessee Code 56-7-2003

  • Commissioner: means the commissioner of commerce and insurance. See Tennessee Code 56-1-102
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
(2) The plan is operated on a not-for-profit basis under the sponsorship of a not-for-profit organization;
(3) Covered primary care services are provided to enrollees either by providers on staff of the sponsoring organization or by volunteers recruited from a local medical society who have, in both instances, agreed to provide their services for free or for nominal reimbursement for out-of-pocket expenses and/or expendable supplies directly related to, and incurred as a result of, the service provided to the enrollee;
(4) Payments to outside contractors for marketing, claims administration and similar services total no more than ten percent (10%) of the total charges;
(5) The plan has received the approval and endorsement of the local medical society in consultation with the Tennessee Medical Association;
(6) Except as provided in subdivision (3), no portion of any fees or charges under the plan shall be paid directly or indirectly as salary to any officer or director of the sponsoring not-for-profit corporation; and
(7) The sponsoring not-for-profit corporation files an annual report with the commissioner within ninety (90) days of the close of the corporation’s fiscal year that includes, at a minimum, the following information:

(A) The number of plan enrollees;
(B) Total services rendered under the plan;
(C) Plan financial statements;
(D) Administrative costs and salaries paid by the plan; and
(E) Other information that may be reasonably requested by the commissioner.
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