Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO:
KRS
304.1-050,
304.1-120,
304, 304.2-160, 304.2-165 304.5-040, 304.9-020, 304.9-051, 304.11-030,
304.11-045, 304.17A-005(22), 304.17A-410(7), 304.17A-600, 304.17A-633,
304.17A-802, 304.17A-812, 304.99-020,
29
U.S.C. §
1002(40).
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
304.2-110 authorizes the Commissioner of
Insurance to make reasonable administrative regulations necessary for or as an
aid to the effectuation of any provision of the Kentucky Insurance Code.
KRS
304.4-010 requires the commissioner to
established the fees charged by the department and the services for which fees
shall be charged by administrative regulation. This administrative regulation
requires multiple employer welfare arrangements to provide information to the
Commissioner of Insurance so the Commissioner of Insurance can enforce
applicable laws. This administrative regulation also identifies the provisions
of the Insurance Code that will be applicable to multiple employer welfare
arrangements.
Section 1. Definitions.
(1) "Administrator" is defined by
KRS
304.9-051(1).
(2) "Agent" is defined by
KRS
304.9-020(1).
(3) "Commissioner" is defined by
KRS
304.1-050(1).
(4) "Department" is defined by
KRS
304.1-050(2).
(5) "Health benefit plan" is defined by
KRS
304.17A-005(22).
(6) "Health insurance policy" means "health
benefit plan" as defined by
KRS
304.5-040.
(7) "Health insurance stop-loss policy" is
defined by
KRS
304.17A-410(7).
(8) "MEWA" or "multiple employer welfare
arrangement":
(a) Is defined by
29
U.S.C. 1002(40);
and
(b) Does not mean an
arrangement under which health care benefits are fully insured by an insurer
authorized to do business in Kentucky.
(9) "Person" is defined by
KRS
304.1-020.
(10) "Private review agent" is defined by
KRS
304.17A-600(11).
Section 2.
(1) A MEWA seeking initial registration shall
file with the commissioner an Application for a Certificate of Registration of
a Multiple Employer Welfare Arrangement (MEWA) and obtain registration approval
from the commissioner pursuant to Section 4 of this administrative
regulation.
(2) A MEWA shall submit
an application fee of $500 with the application.
(3) The application shall include the
information required in Section 3 of this administrative regulation.
Section 3. Written Information to
be Filed with the Commissioner. The information required to be filed in writing
with the commissioner in support of an application for a certificate of
registration pursuant to Section 2 of this administrative regulation shall
include:
(1) The employer identification
number assigned by the Internal Revenue Service to the MEWA;
(2) A copy of any trust document used by the
MEWA;
(3) A copy of any health
benefits or life benefits plan documents;
(4) A copy of the most recent Form 5500 and
M-1 filing made by the MEWA to the United States Department of Labor;
(5) A copy of any audits conducted with
respect to the MEWA;
(6) A copy of
any actuarial reports prepared for the MEWA;
(7) A copy of any summary annual reports
published for participants in the MEWA;
(8) A copy of any contracts with agents or
administrators;
(9) The names of
insurers and policy numbers for bonds covering fiduciaries of the
MEWA;
(10) A copy of any stop-loss,
excess, or reinsurance policies held by the MEWA;
(11) The AM Best rating of the stop-loss
insurer issuing a policy to the MEWA;
(12) A list of all Kentucky employers
participating in the MEWA, including full mailing addresses;
(13) A list of the names, addresses, official
positions, and biographical information of all officers and trustees of the
MEWA;
(14) A copy of any marketing
materials and rate manuals; and
(15) The total number of employees,
dependents, and beneficiaries participating in the MEWA.
Section 4. Issuance of Certificate of
Registration.
(1) Upon receipt of an
application for a certificate of registration submitted in accordance with
Section 2 of this administrative regulation and the written information
submitted in accordance with Section 3 of this administrative regulation, the
commissioner shall issue or deny the application. A certificate of registration
shall be issued only if the commissioner finds the following conditions are
met:
(a) The persons responsible for the
conduct of the affairs of the MEWA shall be competent, trustworthy, and possess
good reputations; and
(b) The MEWA
shall be financially responsible and reasonably expected to meet its
obligations to participants and prospective participants. In making this
determination the commissioner shall consider:
1. The adequacy of working capital;
2. Any agreement with an insurer, a
government, or any other organization for insuring the payment of health claims
or the provisions for automatic applicability of an alternative coverage in the
event of discontinuance of the coverage offered through the MEWA; and
3. Compliance with
KRS
304.17A-812 as a guarantee that the financial
solvency obligations of the MEWA shall be met.
(2) A MEWA subject to the jurisdiction of the
department shall comply with any applicable requirements of KRS Chapter 304,
including
KRS
304.17A-600 through
304.17A-633.
A MEWA that is issued a certificate of registration shall comply with the
requirements as established in
KRS
304.17A-600 through
304.17A-633.
A MEWA may contract with a registered private review agent that is licensed in
Kentucky to fulfill these requirements.
(3) A MEWA that is issued a certificate of
registration shall be subject to the commissioner's authority to investigate
complaints pursuant to
KRS 304.2-160 and
304.2-165.
Section 5. Renewal of Certificate
of Registration.
(1) A MEWA shall annually
renew a certificate of registration by submitting:
(a) The application required by Section 2 of
this administrative regulation;
(b)
The information required by Section 3 of this administrative
regulation.
(2) The
information required by subsection (1) of this section shall be submitted to
the department no later than March 1 of each year.
Section 6. Penalties and Liability. A person
who violates Section 2 of this administrative regulation shall incur a civil
penalty of $1,000 for each violation.
Section
7. Exemptions. The provisions of this administrative regulation
shall not apply to a self-insured employer organized association group as
defined by
KRS
304.17A-802(10).
Section 8. Incorporated by Reference.
(1) The following material is incorporated by
reference:
(a) Application for a
Certification of Registration of a MEWA (CoR MEWA Form), 7/2021;
(b) United States Department of Labor Form
5500, 2020;
(c) United States
Department of Labor Form M-1, 2020; and
(d) Kentucky Designation of Person to Receive
Legal Process (Form 800), 1/2011.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Kentucky Department of
Insurance, 500 Mero Street, Frankfort, Kentucky 40601, Monday through Friday, 8
a.m. to 4:30 p.m. This material is also available on the department's internet
Web site at
http://insurance.ky.gov/.
STATUTORY AUTHORITY:
KRS
304.2-110,
304.4-010