415-E:3 General Eligibility. –
I. To meet the requirements for approval and to maintain a multiple-employer welfare arrangement, an arrangement shall be:
(a) Nonprofit.
(b) Established by a trade association, industry association, political subdivision of the state, religious organization, or professional association of employers or professionals which has a constitution or bylaws and which has been organized and maintained in good faith for a continuous period of one year for purposes other than that of obtaining or providing insurance.
(c) Operated pursuant to a trust agreement by a board of trustees which shall have complete fiscal control over the arrangement and which shall be responsible for all operations of the arrangement. The trustees selected shall be owners, partners, officers, directors, or employees of one or more employers in the arrangement. A trustee may not be an owner, officer, or employee of the administrator or service company of the arrangement. The trustees shall have the authority to approve applications of association members for participation in the arrangement and to contract with an authorized administrator or service company to administer the day-to-day affairs of the arrangement.
(d) Neither offered nor advertised to the public generally.
(e) Operated in accordance with sound actuarial principles.
II. The arrangement shall issue to each covered employee a policy contract, certificate, summary plan description, or other evidence of the benefits and coverages provided. This evidence of the benefits and coverages provided shall contain in boldfaced print in a conspicuous location, the following statement: "The benefits and coverages described herein are provided through a trust fund established and funded by a group of employers." Arrangements in existence prior to January 1, 1992, that have previously issued benefit descriptions to employees may meet the disclosure requirements under this chapter by issuing to each employee such additional written material necessary to meet the requirements of this paragraph.
II-a. Each arrangement shall provide to each covered employee, on request, a written statement of the dollar amount of allowable benefit for any procedure which is requested by the appropriate procedure code.
II-b. No arrangement shall extend preexisting condition exclusions beyond a period of 9 consecutive months after the date of enrollment of the person's health coverage.
III. Each arrangement shall maintain specific excess insurance with a retention level determined in accordance with sound actuarial principles and approved by the commissioner.
IV. Each arrangement shall establish and maintain appropriate loss reserves determined in accordance with sound actuarial principles and approved by the commissioner.
V. The commissioner shall not grant or continue approval until such time as the arrangement replaces any trustee found by the commissioner, upon the presentation of sufficient evidence:
(a) To be incompetent;
(b) To be guilty of, or to have pled guilty or no contest to a felony, or a crime involving moral turpitude;
(c) To have had any type of insurance license revoked in this or any other state;
(d) To have improperly manipulated assets, accounts, or specific excess insurance or to have otherwise acted in bad faith.
VI. To qualify for and retain approval to transact business, an arrangement shall make all contracts with administrators or service companies available for inspection by the department initially, and thereafter upon reasonable notice.
VII. Failure to maintain compliance with applicable eligibility or filing requirements established by this section shall be grounds for suspension or revocation of approval of an arrangement, provided, however, that such arrangement shall have 60 days after notification by the commissioner to take such action necessary to correct the deficiency.