2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 514E - IOWA COMPREHENSIVE HEALTH INSURANCE ASSOCIATION
514E.2 - IOWA COMPREHENSIVE HEALTH INSURANCE ASSOCIATION.

        514E.2  IOWA COMPREHENSIVE HEALTH INSURANCE
      ASSOCIATION.
         1.  The Iowa comprehensive health insurance association is
      established as a nonprofit corporation.  The association shall assure
      that benefit plans as authorized in section 514E.1, subsection 2, for
      an association policy, are made available to each eligible Iowa
      resident and each federally eligible individual applying to the
      association for coverage.  The association shall also be responsible
      for administering the Iowa individual health benefit reinsurance
      association pursuant to all of the terms and conditions contained in
      chapter 513C.
         a.  All carriers and all organized delivery systems licensed
      by the director of public health providing health insurance or health
      care services in Iowa, whether on an individual or group basis, and
      all other insurers designated by the association's board of directors
      and approved by the commissioner shall be members of the association.

         b.  The association shall operate under a plan of operation
      established and approved under subsection 3 and shall exercise its
      powers through a board of directors established under this section.
         2. a.  The board of directors of the association shall consist
      of all of the following:
         (1)  Two members who shall be representatives of the two largest
      domestic carriers of individual health insurance in the state as of
      the calendar year ending December 31, 2000, based on earned premium
      standards.
         (2)  Three members who shall be representatives of the three
      largest carriers of health insurance in the state, based on earned
      premium standards, excluding Medicare supplement coverage premiums,
      that are not otherwise represented.
         (3)  Two members selected by the members of the association, one
      of whom shall be a representative from a corporation operating
      pursuant to chapter 514 on July 1, 1989, or any successor in
      interest, and one of whom shall be a representative of an organized
      delivery system or an insurer providing coverage pursuant to chapter
      509 or 514A.
         (4)  Four public members selected by the governor.
         (5)  The commissioner or the commissioner's designee from the
      division of insurance.
         (6)  Four members of the general assembly, one of whom shall be
      appointed by the speaker of the house of representatives, one of whom
      shall be appointed by the minority leader of the house of
      representatives, one of whom shall be appointed by the president of
      the senate after consultation with the majority leader, and one of
      whom shall be appointed by the minority leader of the senate, who
      shall be ex officio, nonvoting members.
         b.  The composition of the board of directors shall be in
      compliance with sections 69.16 and 69.16A.  The governor's appointees
      shall be chosen from a broad cross-section of the residents of this
      state.
         c.  Members of the board may be reimbursed from the moneys of
      the association for expenses incurred by them as members, but shall
      not be otherwise compensated by the association for their services.
         3.  The association shall submit to the commissioner a plan of
      operation for the association and any amendments necessary or
      suitable to assure the fair, reasonable, and equitable administration
      of the association.  The plan of operation becomes effective upon
      approval in writing by the commissioner prior to the date on which
      the coverage under this chapter must be made available.  After notice
      and hearing, the commissioner shall approve the plan of operation if
      the plan is determined to be suitable to assure the fair, reasonable,
      and equitable administration of the association, and provides for the
      sharing of association losses, if any, on an equitable and
      proportionate basis among the member carriers.  If the association
      fails to submit a suitable plan of operation within one hundred
      eighty days after the appointment of the board of directors, or if at
      any later time the association fails to submit suitable amendments to
      the plan, the commissioner shall adopt, pursuant to chapter 17A,
      rules necessary to implement this section.  The rules shall continue
      in force until modified by the commissioner or superseded by a plan
      submitted by the association and approved by the commissioner.  In
      addition to other requirements, the plan of operation shall provide
      for all of the following:
         a.  The handling and accounting of assets and moneys of the
      association.
         b.  The amount and method of reimbursing members of the board.

         c.  Regular times and places for meeting of the board of
      directors.
         d.  Records to be kept of all financial transactions, and the
      annual fiscal reporting to the commissioner.
         e.  Procedures for selecting the board of directors and
      submitting the selections to the commissioner for approval.
         f.  The periodic advertising of the general availability of
      health insurance coverage from the association.
         g.  Additional provisions necessary or proper for the
      execution of the powers and duties of the association.
         4.  The plan of operation may provide that the powers and duties
      of the association may be delegated to a person who will perform
      functions similar to those of the association.  A delegation under
      this section takes effect only upon the approval of both the board of
      directors and the commissioner.  The commissioner shall not approve a
      delegation unless the protections afforded to the insured are
      substantially equivalent to or greater than those provided under this
      chapter.
         5.  The association has the general powers and authority
      enumerated by this subsection and executed in accordance with the
      plan of operation approved by the commissioner under subsection 3.
      The association has the general powers and authority granted under
      the laws of this state to carriers licensed to issue health
      insurance.  In addition, the association may do any of the following:

         a.  Enter into contracts as necessary or proper to carry out
      this chapter.
         b.  Sue or be sued, including taking any legal action
      necessary or proper for recovery of any assessments for, on behalf
      of, or against participating carriers.
         c.  Take legal action necessary to avoid the payment of
      improper claims against the association or the coverage provided by
      or through the association.
         d.  Establish or utilize a medical review committee to
      determine the reasonably appropriate level and extent of health care
      services in each instance.
         e.  Establish appropriate rates, scales of rates, rate
      classifications, and rating adjustments, which rates shall not be
      unreasonable in relation to the coverage provided and the reasonable
      operations expenses of the association.
         f.  Pool risks among members.
         g.  Issue association policies on an indemnity or provision of
      service basis providing the coverage required by this chapter.
         h.  Administer separate pools, separate accounts, or other
      plans or arrangements considered appropriate for separate members or
      groups of members.
         i.  Operate and administer any combination of plans, pools, or
      other mechanisms considered appropriate to best accomplish the fair
      and equitable operation of the association.
         j.  Appoint from among members appropriate legal, actuarial,
      and other committees as necessary to provide technical assistance in
      the operation of the association, policy and other contract design,
      and any other functions within the authority of the association.
         k.  Hire independent consultants as necessary.
         l.  Develop a method of advising applicants of the
      availability of other coverages outside the association.
         m.  Include in its policies a provision providing for
      subrogation rights by the association in a case in which the
      association pays expenses on behalf of an individual who is injured
      or suffers a disease under circumstances creating a liability upon
      another person to pay damages to the extent of the expenses paid by
      the association but only to the extent the damages exceed the policy
      deductible and coinsurance amounts paid by the insured.  The
      association may waive its subrogation rights if it determines that
      the exercise of the rights would be impractical, uneconomical, or
      would work a hardship on the insured.
         6.  Rates for coverages issued by the association shall reflect
      rating characteristics used in the individual insurance market.  The
      rates for a given classification shall not be more than one hundred
      fifty percent of the average premium or payment rate for the
      classification charged by the five carriers with the largest health
      insurance premium or payment volume in the state during the preceding
      calendar year.  In determining the average rate of the five largest
      carriers, the rates or payments charged by the carriers shall be
      actuarially adjusted to determine the rate or payment that would have
      been charged for benefits similar to those issued by the association.

         7. a.  Following the close of each calendar year, the
      association shall determine the net premiums and payments, the
      expenses of administration, and the incurred losses of the
      association for the year.  The association shall certify the amount
      of any net loss for the preceding calendar year to the commissioner
      of insurance and director of revenue.  Any loss shall be assessed by
      the association to all members in proportion to their respective
      shares of total health insurance premiums or payments for subscriber
      contracts received in Iowa during the second preceding calendar year,
      or with paid losses in the year, coinciding with or ending during the
      calendar year or on any other equitable basis as provided in the plan
      of operation.  In sharing losses, the association may abate or defer
      in any part the assessment of a member, if, in the opinion of the
      board, payment of the assessment would endanger the ability of the
      member to fulfill its contractual obligations.  The association may
      also provide for an initial or interim assessment against members of
      the association if necessary to assure the financial capability of
      the association to meet the incurred or estimated claims expenses or
      operating expenses of the association until the next calendar year is
      completed.  Net gains, if any, must be held at interest to offset
      future losses or allocated to reduce future premiums.
         b.  For purposes of this subsection, "total health insurance
      premiums" and "payments for subscriber contracts" include,
      without limitation, premiums or other amounts paid to or received by
      a member for individual and group health plan care coverage provided
      under any chapter of the Code or Acts, and "paid losses"
      includes, without limitation, claims paid by a member operating on a
      self-funded basis for individual and group health plan care coverage
      provided under any chapter of the Code or Acts.  For purposes of
      calculating and conducting the assessment, the association shall have
      the express authority to require members to report on an annual basis
      each member's total health insurance premiums and payments for
      subscriber contracts and paid losses.  A member is liable for its
      share of the assessment calculated in accordance with this section
      regardless of whether it participates in the individual insurance
      market.
         8.  The association shall conduct periodic audits to assure the
      general accuracy of the financial data submitted to the association,
      and the association shall have an annual audit of its operations,
      made by an independent certified public accountant.
         9.  The association is subject to examination by the commissioner
      of insurance.  Not later than April 30 of each year, the board of
      directors shall submit to the commissioner a financial report for the
      preceding calendar year in a form approved by the commissioner.
         10.  The association is subject to oversight by the legislative
      fiscal committee of the legislative council.  Not later than April 30
      of each year, the board of directors shall submit to the legislative
      fiscal committee a financial report for the preceding year in a form
      approved by the committee.
         11.  All policy forms issued by the association must be filed with
      and approved by the commissioner before their use.
         12.  The association is exempt from payment of all fees and all
      taxes levied by this state or any of its political subdivisions.
         13.  An insurer may offset an assessment made pursuant to this
      chapter against its premium tax liability pursuant to chapter 432 to
      the extent of twenty percent of the amount of the assessment for each
      of the five calendar years following the year in which the assessment
      was paid.  If an insurer ceases doing business, all uncredited
      assessments may be credited against its premium tax liability for the
      year it ceases doing business.  

         Section History: Recent Form

         86 Acts, ch 1156, § 2; 89 Acts, ch 304, § 1004--1006; 90 Acts, ch
      1223, § 28; 97 Acts, ch 103, §44--48; 2001 Acts, ch 125, §7; 2003
      Acts, ch 145, §286; 2004 Acts, ch 1110, §44--46; 2004 Acts, ch 1158,
      §10--13, 21; 2005 Acts, ch 70, §14--16, 51; 2008 Acts, ch 1156, § 50,
      58; 2008 Acts, ch 1188, § 18; 2009 Acts, ch 118, §3, 5
         Referred to in § 513C.11, 514E.1 

         Footnotes

         2005 amendments take effect April 28, 2005, and apply
      retroactively on and after July 1, 1986; 2005 Acts, ch 70, §51