HB 181 LIFE & HEALTH INSURANCE GUARANTY ACT CHANGES

Rep Elizabeth "Liz" Thomson

Actions: [2] not prntd-HRC [4] w/drn-prntd-ref- HHHC/HCEDC-HHHC [6] DP-HCEDC [9] DP [14] PASSED/H (61-1) [9] STBTC-STBTC [10] DP [14] PASSED/S (35-2) SGND BY GOV (Mar. 1) Ch. 36.

Scheduled: Not Scheduled

 HB 181 adds managed care organizations to the Life and Health Insurance Quaranty Act as a member.  

 Synopsis: HB 181 relates to insurance by modifying the Life and Health Insurance Guaranty Association Act to include health maintenance organizations as members of the Life and Health Insurance Guaranty Association and repealing certain Sections of earlier law. 
Analysis: HB 181 will now add health maintenance organizations as members of the Life and Health Insurance Guaranty Association.
Member insurer is now defined in HB 181 to read: "member insurer" means an insurer or health maintenance organization that is licensed or that holds a certificate of authority to transact in this state any kind of insurance or health maintenance organization business for which coverage is provided pursuant to Section 59A-42-4 NMSA 1978 and includes an insurer or health maintenance organization whose license or certificate of authority in this state may have been suspended, revoked, not renewed or voluntarily withdrawn.
Certain insurance products are exempt from membership such as profit on nonprofit health care plan, dental, vision, mandatory state pooling plan, insurance exchange or mutual assessment company, also, charitable organization in good standing with the Superintendent, Medicare supplemental, and several other type health related plans or products. 
Section 59A-42-4 NMSA 1978,referenced above refers to Definitions listed in the Insurance Code. 
Specific reference is made to health maintenance organizations  which would now be subject to all of the requirements of the other member insurers listed in the Insurance Code. 
 A new definition is added HB 181 entitled, structured settlement factoring transaction, which means a transfer of structured settlement payment rights, including portions of structured settlement payments made for consideration by means of sale, assignment, pledge or other form of encumbrance or alienation.
Other now states that coverage shall be provided to the persons specified in the bill for policies or contracts of direct, non-group life insurance, health insurance, which for the purposes of the Life and Health Insurance Guaranty Association Act includes health maintenance organization subscriber contracts and certificates, or  annuities and supplemental contracts. 
Coverage will not be provided under Medicare or Medicaid or a structured settlement annuity benefits to which a payee or beneficiary has transferred the payee's or beneficiary's rights in a structured settlement factoring transaction.
For purposes of the Life and Health Insurance Guaranty Association Act, benefits provided by a long-term care rider to a life insurance policy or annuity contract shall be considered the same type of benefit as the base life insurance policy or annuity contract to which it relates.
All insurers shall organize and remain members of the Association as a condition of their authority to transact insurance or a health maintenance organization business. Health maintenance organizations have been added to the above. 
New language allows the Association to, unless prohibited by law, in accordance with the terms and conditions of the policy or contract, file for an actuarially justified rate or premium increase for a policy or contract for which it provides coverage under the Life and Health Insurance Guaranty Association Act. 
The Board of the Association may make two types of assessments. The Type A assessment for administrative cost and the B assessment is for impaired insurers expenses.
New language provides that the amount of the class B assessment for long term care insurance written by the impaired or insolvent insurer shall be allocated according to a methodology included in the plan of operation and approved by the superintendent. The methodology shall provide for fifty percent of the assessment to be allocated to accident and health member insurers and fifty percent to be allocated to life and annuity member insurers. 
Repealed 59A-46-15. Having to do with enrollment period; replacement coverage in the event of insolvency.
The effective date of the provisions of this Act is January 1, 2025.