Ala. Admin. Code r. 482-1-115-.04

Current through Register Vol. 42, No. 11, August 30, 2024

Section 482-1-115-.04 - Board Of Directors

(1) The Plan shall operate subject to the supervision and control of a Board of Directors. The Board, which shall be the Plan Administrator, shall consist of the Commissioner, or his or her designated representative, who shall serve as an ex officio member of the Board and shall be its chairman, and eight members appointed by the Commissioner. At least two (2) Board members shall be individuals not representing insurers or health care providers. At least two (2) Board members shall be representatives of insurers.

(2) The initial Board members shall be appointed as follows: two members to serve a term of one (1) year; three members to serve a term of two (2) years; and three members to serve a term of three (3) years. Subsequent Board members shall serve for a term of three (3) years. A Board member's term shall continue until his or her successor is appointed.

(3) Vacancies in the Board shall be filled by the Commissioner. Board members may be removed by the Commissioner for cause.

(4) Board members shall not be compensated in their capacity as Board members but may be reimbursed for reasonable expenses incurred in the necessary performance of their duties.

(5) The Board shall submit to the Commissioner a plan of operation for the Plan and any amendments thereto necessary or suitable to assure the fair, reasonable and equitable administration of the Plan. The plan of operation shall become effective upon approval in writing by the Commissioner consistent with the date on which the coverage under this Plan must be made available. If the Board fails to submit a suitable plan of operation within 180 days after the appointment of the Board of directors, or at any time thereafter fails to submit suitable amendments to the plan of operation, the Commissioner shall adopt and promulgate such rules as are necessary or advisable to effectuate the provisions of this rule. Such rules shall continue in force until modified by the Commissioner or superseded by a plan of operation submitted by the Board and approved by the Commissioner.

(6) The plan of operation shall include, but not be limited to, the following:

(a) Procedures for Board meetings.

(b) Procedures for operation of the Plan.

(c) Procedures for selecting an Operations Administrator and a Claims Administrator or Administrators.

(d) Procedures to create a fund, under management of the Board, for administrative expenses.

(e) Procedures for premium and assessment billings.

(f) Procedures for the managing, accounting and auditing of assets, monies and claims of the Plan.

(g) Procedures to publicize the existence of the Plan, the eligibility requirements, and procedures for enrollment; and to maintain public awareness of the Plan.

(h) Procedures under which applicants and participants may have grievances reviewed by a grievance committee appointed by the Board.

(i) Procedures for other matters as may be necessary and proper for the execution of the Board's powers, duties and obligations under this chapter.

(7) In accordance with Section 27-52-2, the Plan shall have the general powers and authority granted under the laws of this state to health insurers and in addition thereto, the specific authority to do all of the following:

(a) Enter into contracts as are necessary or proper to carry out the provisions and purposed of this chapter, including the authority, with the approval of the Commissioner, to enter into contracts with similar plans of other states for the joint performance of common administrative functions, or with persons or other organizations for the performance of administrative functions.

(b) Sue or be sued, including taking any legal actions necessary or proper to recover or collect assessments due the Plan.

(c) Take such legal action as necessary to do any of the following:

1. To avoid the payment of improper claims against the Plan or the coverage provided by or through the Plan.

2. To recover any amounts erroneously or improperly paid by the Plan.

3. To recover any amounts paid by the Plan as a result of mistake of fact or law.

4. To recover other amounts due the Plan.

(d) Establish, and modify from time to time as appropriate, premiums, premium schedules, premium adjustments, expense allowances, claim reserve formulas and any other actuarial function appropriate to the operation of the Plan. Premiums and premium schedules may be adjusted for appropriate factors such as age, sex and geographic variation in claim cost and shall take into consideration appropriate factors in accordance with established actuarial and underwriting practices.

(e) Issue policies of insurance in accordance with the requirements of the Act and this chapter.

(f) Appoint appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the Plan, policy and other contract design, and any other function within the authority of the plan.

(g) Borrow money to effect the purposes of the Plan. Any notes or other evidence of indebtedness of the Plan not in default shall be legal investments for insurers and may be carried as admitted assets.

(h) Establish rules, conditions and procedures for participating insurers desiring to issue plan coverages in their own name.

(i) Employ and fix the compensation of employees.

(j) Prepare and distribute certificate of eligibility forms and enrollment instruction forms to insurance producers and to the general public.

(k) Provide for reinsurance of risks incurred by the Plan.

(l) Issue additional types of health insurance policies to provide optional coverages.

(m) Provide for and employ cost containment measures and requirements including, but not limited to, preadmission screening, second surgical opinion, concurrent utilization review, and individual case management for the purpose of making the benefit plan more cost effective.

(n) Design, utilize, contract or otherwise arrange for the delivery of cost effective health care services, including establishing or contracting with preferred provider organizations, health maintenance organizations and other limited network provider arrangements.

(o) Adopt bylaws, policies and procedures as may be necessary or convenient for implementation of the Act and the operation of the Plan.

(8) The Board shall make an annual report to the Commissioner. The report shall summarize the activities of the Plan in the preceding calendar year, including the net written and earned premiums, Plan enrollment, the expense of administration, and the paid and incurred losses.

(9) Neither the Board nor its employees shall be liable for any obligations of the Plan. No member or employee of the Board shall be liable, and no cause of action of any nature may arise against them, for any act or omission related to the performance of their powers and duties under the Plan, unless such act or omission constitutes willful or wanton misconduct. The Board may provide in its bylaws or rules for indemnification of, and legal representation for, its members and employees.

Author: Elizabeth Bookwalter, Associate Counsel

Ala. Admin. Code r. 482-1-115-.04

New Rule: July 23, 1997; effective August 30, 1997. Revised: November 13, 2002; effective December 29, 2002. Filed with LRS December 19, 2002. Rule is not subject to the Alabama Administrative Procedure Act.

Statutory Authority:Code of Ala. 1975, §§ 27-2-17, 27-52-1, etseq.