NAC: CHAPTER 695B - NONPROFIT CORPORATIONS FOR HOSPITAL, MEDICAL AND DENTAL SERVICE

[Rev. 5/25/2022 11:37:17 AM]

[NAC-695B Revised Date: 8-18]

CHAPTER 695B - NONPROFIT CORPORATIONS FOR HOSPITAL, MEDICAL AND DENTAL SERVICE

GENERAL PROVISIONS

695B.002 Definitions.

695B.004 “Commissioner” defined.

695B.006 “Division” defined.

USE OF PREFERRED PROVIDERS OF HEALTH CARE

695B.010 Disclosure of points at which insured’s payment for coinsurance is no longer required; sample calculation of claim; limitation on approval of contract.

695B.020 General requirements for program.

SUMMARY OF COVERAGE

695B.030 Filing, contents and delivery of disclosure.

695B.035 Disclosures in advertising and sales materials; inclusion of certain information in contract for hospital or medical service.

PREMIUM RATES

695B.050 Limitation on frequency of increases; exceptions.

PAYMENT OF BENEFITS

695B.100 Subrogation: Right to recover from third party; lien against recovery; subrogation not basis for denial of payment of benefits.

695B.120 Group benefits payable by more than one insurer to provider; restrictions.

695B.125 Determination of benefits; consideration of coverage under another policy not allowed.

SYSTEM FOR RESOLVING COMPLAINTS OF INSUREDS

695B.200 Requirements for approval.

695B.210 Annual report.

POLICIES FOR STOP-LOSS INSURANCE

695B.250 General provisions.

CONDITION AND AFFAIRS

695B.300 Maintenance of reserve fund.

695B.305 Capital account.

695B.310 Annual statement of condition and affairs; financial statements; quarterly statement of domestic nonprofit organization; extension of time for filing statement; disciplinary action for failure to file statement.

695B.320 Conduct of examinations.

GENERAL PROVISIONS

NAC 695B.002 Definitions. (NRS 679B.130) As used in this chapter, unless the context otherwise requires, the words and terms defined in NAC 695B.004 and 695B.006 have the meanings ascribed to them in those sections.

(Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99)

NAC 695B.004 “Commissioner” defined. (NRS 679B.130) “Commissioner” means the Commissioner of Insurance.

(Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99)

NAC 695B.006 “Division” defined. (NRS 679B.130) “Division” means the Division of Insurance of the Department of Business and Industry.

(Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99)

USE OF PREFERRED PROVIDERS OF HEALTH CARE

NAC 695B.010 Disclosure of points at which insured’s payment for coinsurance is no longer required; sample calculation of claim; limitation on approval of contract. (NRS 679B.130, 695B.172, 695B.185)

1. The point at which an insured’s payment for coinsurance is no longer required to be paid for preferred providers of health care and for providers who are not preferred in a group contract for hospital, medical or dental services pursuant to subsection 6 of NRS 695B.185 must be disclosed to the insured and included in the disclosure filed pursuant to NRS 695B.172.

2. Each form of contract filed with the Commissioner must include a sample calculation of a claim using the method of calculation selected by the corporation.

3. The Commissioner will not approve a contract if the point at which an insured’s payment for coinsurance is no longer required to be paid for preferred providers of health care and for providers who are not preferred is misleading or deceptively affects the risk purported to be assumed.

(Added to NAC by Comm’r of Insurance, eff. 6-1-88; A 6-20-90; 9-16-92)

NAC 695B.020 General requirements for program. (NRS 679B.130, 695B.185) Any nonprofit corporation for hospital, medical or dental services wishing to offer a program using preferred providers of health care pursuant to NRS 695B.185 shall comply with the provisions of NAC 689B.120 to 689B.160, inclusive.

(Added to NAC by Comm’r of Insurance, 7-19-90, eff. 10-1-90)

SUMMARY OF COVERAGE

NAC 695B.030 Filing, contents and delivery of disclosure. (NRS 679B.130, 695B.172, 695B.174, 695B.280)

1. Each corporation shall file with the Commissioner, for his or her approval, a disclosure summarizing the coverage provided by a group contract for hospital or medical service offered by the corporation.

2. The disclosure must:

(a) Be in at least 10-point type;

(b) Include the name, address and telephone number of the corporation;

(d) Include a statement describing the principal benefits and the type of coverage being provided;

(e) Include a description of any provision of the contract which significantly excludes, eliminates, reduces or in any other manner operates to limit the payment of the benefits;

(f) Include a statement concerning the renewal provisions of the contract; and

(g) Define the term “usual and customary” or any similar term used in the contract.

3. The agent for the corporation, the corporation after a response to a direct-response solicitation or the broker representing the insured shall deliver the approved disclosure summary to the proposed policyholder as provided in NRS 695B.174.

(Added to NAC by Comm’r of Insurance, eff. 2-21-90)

NAC 695B.035 Disclosures in advertising and sales materials; inclusion of certain information in contract for hospital or medical service. (NRS 679B.130, 695B.172, 695B.280)

1. As part of the disclosure required by NRS 695B.172, an insurer shall disclose in the advertising and sales materials that the insurer provides to employers:

(a) The term of the contract applicable to the premium rates;

(b) A general description of the underwriting factors that the insurer used to calculate premiums; and

2. An insurer shall include a copy of the information described in paragraph (c) of subsection 1 in the contract for hospital or medical service that the insurer provides to a subscriber.

(Added to NAC by Comm’r of Insurance by R009-02, eff. 5-23-2002; A by R009-02, 7-11-2002)

REVISER’S NOTE.

The regulation of the Commissioner of Insurance filed with the Secretary of State on July 11, 2002 (LCB File No. R009-02), the source of this section (section 16 of the regulation), contains the following provision not included in NAC:

“Sec. 20. Sections 6, 13, 16 and 19 of this regulation [NAC 689B.205, 689C.172, 695B.035 and 695C.295] apply to any disclosures given for health insurance, group contracts for hospital or medical service and group health care plans offered by insurers, nonprofit corporations for hospital, medical or dental services and health maintenance organizations that are offered or issued on or after July 10, 2002.”

PREMIUM RATES

NAC 695B.050 Limitation on frequency of increases; exceptions. (NRS 679B.130, 695B.280)

1. Except as otherwise provided in this section, a nonprofit corporation for hospital, medical or dental services shall not increase the premium rates under a group contract for hospital, medical or dental services more frequently than every 6 months unless the increase in the premium rates is being made because:

(a) An employer has requested a change in its group contract for hospital, medical or dental services;

(b) There has been a change in the number of employees covered by an employer that would affect the insurance premium rate of the employer; or

(c) There has been a change in federal or state law which affects the cost of providing services under the group contract for hospital, medical or dental services.

2. If a nonprofit corporation for hospital, medical or dental services issues a group contract for hospital, medical or dental services to a class of employers that consists solely of bona fide associations and uses a common date of renewal for that class, an increase in the premium rates for that class does not violate the provisions of subsection 1 solely because at least one but not all the members of that class will have an increase in premium rates more frequently than every 6 months.

(Added to NAC by Comm’r of Insurance by R009-02, eff. 5-23-2002; A by R009-02, 7-11-2002)

PAYMENT OF BENEFITS

NAC 695B.100 Subrogation: Right to recover from third party; lien against recovery; subrogation not basis for denial of payment of benefits. (NRS 679B.130, 695B.280)

1. Except as otherwise provided by specific federal or state statute or regulation, a nonprofit corporation for hospital, medical or dental service may include in a group contract for hospital, medical or dental service issued pursuant to chapter 695B of NRS a provision for subrogation regarding the right of an insured to recover, and the imposition of a lien upon any recovery by an insured, from a third person for the cost of medical benefits reimbursed by the corporation to the insured because of injuries incurred by the insured as a result of the actions of the third person. The amount of the lien must not be more than the amount of the reimbursements paid by the corporation.

2. A nonprofit corporation for hospital, medical or dental service shall not deny the payment of any benefits based upon such a provision for subrogation.

(Added to NAC by Comm’r of Insurance, eff. 12-15-94)

NAC 695B.120 Group benefits payable by more than one insurer to provider; restrictions. (NRS 679B.130, 695B.280) When the benefits of a group contract for hospital, medical or dental service issued pursuant to chapter 695B of NRS are payable by more than one insurer to a provider, the contract must not require the insured, or any secondary insurer who is a:

1. Group health insurer;

2. Health maintenance organization; or

3. Nonprofit corporation for hospital, medical or dental service,

Ê to pay more than the remaining deductible and coinsurance, if any, based upon the rates established by the primary insurer for its payment of that provider.

(Added to NAC by Comm’r of Insurance, eff. 12-15-94)

NAC 695B.125 Determination of benefits; consideration of coverage under another policy not allowed. (NRS 679B.130, 695B.280) A group contract for hospital, medical or dental service issued pursuant to chapter 695B of NRS:

1. Must not, for the determination of benefits payable for the coordination of benefits, provide for the consideration of any benefits payable pursuant to any individual health insurance, health insurance under a franchise plan, no-fault automobile insurance or automobile medical insurance.

2. Must provide for the payment of benefits without regard to any benefits payable pursuant to any individual health insurance, health insurance under a franchise plan, no-fault automobile insurance or automobile medical insurance.

(Added to NAC by Comm’r of Insurance, eff. 12-15-94)

SYSTEM FOR RESOLVING COMPLAINTS OF INSUREDS

NAC 695B.200 Requirements for approval. (NRS 679B.130, 695B.380) To obtain approval of a system for resolving complaints of insureds concerning health care services covered by an insurer from the Commissioner as required pursuant to NRS 695B.380, an insurer must:

1. Demonstrate that the system will resolve oral and written complaints concerning:

(a) Payment or reimbursement for covered health care services;

(b) The availability, delivery or quality of covered health care services, including, without limitation, an adverse determination made pursuant to utilization review; and

2. Submit to the Division:

(a) The name and title of the employee responsible for the system;

(b) A description of the procedure used to notify an insured of the decision regarding his or her complaint; and

(Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99)

NAC 695B.210 Annual report. (NRS 679B.130, 695B.390)

1. An insurer shall submit its annual report regarding its system for resolving complaints as required pursuant to NRS 695B.390 on or before June 1 of each year. The insurer shall retain a copy of the annual report for at least 3 years or until the next examination conducted by the Division, whichever is longer.

2. The insurer is not required to include in the annual report information concerning an oral inquiry by an insured relating to a misunderstanding or miscommunication if the misunderstanding or miscommunication was resolved within 1 working day after the inquiry was made. If the misunderstanding or miscommunication was not resolved within 1 working day, the insurer shall report it as a complaint in the annual report.

(Added to NAC by Comm’r of Insurance by R132-98, eff. 3-30-99; A by R008-02, 5-23-2002)

POLICIES FOR STOP-LOSS INSURANCE

NAC 695B.250 General provisions. (NRS 679B.130, 695B.280)

1. An insurer shall not issue a policy for stop-loss insurance for a hospital, medical or dental service plan subject to the provisions of this chapter and chapter 695B of NRS if the policy for stop-loss insurance:

(a) Has an annual attachment point for claims incurred per individual that is lower than $10,000;

(b) Has an annual aggregate attachment point for groups of not more than 50 persons that is lower than the greater of:

(1) The number of group members times $4,000;

(2) One hundred and twenty percent of expected claims; or

(3) Ten thousand dollars;

(c) Has an annual aggregate attachment point for groups of more than 50 persons that is lower than 110 percent of expected claims; or

(d) Provides direct coverage of health care expenses of an individual.

2. For the purposes of this section, an insurer shall determine the number of persons in a group on a consistent basis at least annually.

3. If a policy for stop-loss insurance for a hospital, medical or dental service plan does not meet the criteria set forth in this section, the policy will be deemed to be a health benefit plan for the purposes of this chapter and chapter 695B of NRS.

4. As used in this section:

(a) “Attachment point” means the amount of claims incurred by an insured group beyond which an insurer incurs a liability for payment.

(b) “Expected claims” means the amount of claims that, in the absence of a stop-loss policy or other insurance, are projected to be incurred by an insured group through its health plan.

(c) “Stop-loss insurance” means insurance purchased by an employer to limit exposure to claim expenses under a health benefit plan provided by the employer.

(Added to NAC by Comm’r of Insurance by R113-00, eff. 3-30-2001)

CONDITION AND AFFAIRS

NAC 695B.300 Maintenance of reserve fund. (NRS 679B.130, 695B.140) All reserves maintained by a nonprofit corporation pursuant to NRS 695B.140:

1. Must be deposited in a trust account in a federally insured financial institution located in this State. All income earned by the account belongs to the nonprofit corporation and may be credited and paid to the nonprofit corporation and used for its operations.

2. Are in addition to those reserves established by the nonprofit corporation according to good business and accounting practices for incurred but not reported claims and other similar claims.

(Added to NAC by Comm’r of Insurance by R247-03, eff. 11-12-2004)

NAC 695B.305 Capital account. (NRS 679B.130, 681B.290) Each nonprofit corporation shall maintain a capital account with a net worth in an amount which is not less than the amount of risk-based capital determined in the manner set forth in NRS 681B.290 and the regulations adopted pursuant thereto.

(Added to NAC by Comm’r of Insurance by R132-13, 6-23-2014, eff. 10-1-2014)

NAC 695B.310 Annual statement of condition and affairs; financial statements; quarterly statement of domestic nonprofit organization; extension of time for filing statement; disciplinary action for failure to file statement. (NRS 679B.130, 680A.265, 695B.110, 695B.160)

1. As a condition of doing business in this State, each nonprofit corporation which maintains and operates a hospital, medical or dental service plan must file with the Commissioner an annual statement required by NRS 695B.160 that:

(a) Conforms to the format prescribed by the National Association of Insurance Commissioners in the Annual and Quarterly Statement Instructions for Health and the Accounting Practices and Procedures Manual, which have been adopted by reference in NAC 679B.033;

(b) Contains exhibits and schedules that follow the specifications developed by the National Association of Insurance Commissioners; and

2. Information from the annual statement of the nonprofit corporation must be filed:

(a) Pursuant to the specifications adopted by the National Association of Insurance Commissioners for filing information in an electronic format;

(b) At the central office of the National Association of Insurance Commissioners, 1100 Walnut Street, Suite 1500, Kansas City, Missouri 64106-2197; and

3. If a foreign or alien nonprofit corporation files a statement in an electronic format with the National Association of Insurance Commissioners, that statement will be deemed to have been filed with the Commissioner if:

(a) The foreign or alien nonprofit corporation submits an affidavit, a jurat page or a copy of the jurat page to the Commissioner indicating that the statement has been so filed. If the nonprofit corporation submits a jurat page, the jurat page must:

(1) Conform to the format prescribed by the National Association of Insurance Commissioners in the Annual and Quarterly Statement Instructions for Health, which has been adopted by reference in NAC 679B.033; and

(2) Be executed by a notarial officer pursuant to NRS 240.1655 and 240.167.

(b) The affidavit, jurat page or copy of the jurat page is accompanied by the applicable fees set forth in NRS 680B.010.

4. An annual statement required by NRS 695B.160 to be filed with the Commissioner by a nonprofit corporation must be on the current version of the Annual and Quarterly Statement Blanks for Health adopted by the National Association of Insurance Commissioners, which has been adopted by reference in NAC 679B.033. Each nonprofit corporation shall, in preparing the statement, follow the Annual and Quarterly Statement Instructions for Health adopted by the National Association of Insurance Commissioners, which accompanies the Annual and Quarterly Statement Blanks for Health.

5. If necessary to determine the financial condition of a foreign or alien nonprofit corporation or the fulfillment of contractual obligations or compliance with law by a foreign or alien nonprofit corporation, the Commissioner may require the foreign or alien nonprofit corporation to file a financial statement more frequently than annually. Such a statement must be:

(a) Filed on the current form adopted by the National Association of Insurance Commissioners for the type of nonprofit corporation filing;

(b) Completed in accordance with the instructions accompanying that form; and

6. Each domestic nonprofit corporation shall file a quarterly statement with the Commissioner. A quarterly statement must be:

(a) Filed on the current form adopted by the National Association of Insurance Commissioners for the type of nonprofit corporation filing;

(b) Completed in accordance with the instructions accompanying that form; and

7. The audited financial statement required to be filed pursuant to NRS 680A.265 is a separate document from the annual statement required to be filed pursuant to NRS 695B.160. Each nonprofit corporation filing the audited financial statement shall follow the Annual and Quarterly Statement Instructions for Health adopted by the National Association of Insurance Commissioners. Consolidated statements for nonprofit corporations that are members of an insurance holding company are not acceptable. For the purposes of paragraph (d) of subsection 2 of NRS 695B.110, the term “annual report” means the audited financial statement required to be filed pursuant to NRS 680A.265.

8. The Commissioner may grant a reasonable extension of time for filing the annual statement required by NRS 695B.160 or the audited financial statement required by NRS 680A.265 if the request for an extension is submitted in writing and in advance and shows good cause.

9. The Commissioner will, if appropriate, take disciplinary action pursuant to the applicable provisions of this chapter or chapter 695B of NRS against a nonprofit corporation which fails to file its annual statement or audited financial statement on the prescribed forms, in the prescribed format or by the prescribed date.

10. As used in this section, “jurat page” means a written declaration by a notarial officer that the signer of a document signed the document in the presence of the notarial officer and swore to or affirmed that the statements in the document are true.

(Added to NAC by Comm’r of Insurance by R247-03, eff. 11-12-2004; A by R089-17, 5-16-2018)

NAC 695B.320 Conduct of examinations. (NRS 679B.130, 695B.160) Each examination of a nonprofit corporation which establishes, maintains or operates a hospital, medical or dental service plan, including, without limitation, an examination conducted pursuant to NRS 695B.160, must be conducted in accordance with the requirements found in the handbooks and manuals adopted by reference in NAC 679B.033 and the provisions of NRS 679B.250 to 679B.300, inclusive.

(Added to NAC by Comm’r of Insurance by R247-03, eff. 11-12-2004)