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AN ACT

RELATING TO HEALTH INSURANCE; PROVIDING FOR ADMINISTRATORS

PURSUANT TO THE MEDICAL INSURANCE POOL ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 59A-54-3 NMSA 1978 (being Laws 1987,

Chapter 154, Section 3, as amended) is amended to read:

"59A-54-3. DEFINITIONS.--As used in the Medical

Insurance Pool Act:

A. "board" means the board of directors of the

pool;

B. "creditable coverage" means, with respect to

an individual, coverage of the individual pursuant to:

(1) a group health plan;

(2) health insurance coverage;

(3) Part A or Part B of Title 18 of the

Social Security Act;

(4) Title 19 of the Social Security Act

except coverage consisting solely of benefits pursuant to

Section 1928 of that title;

(5) 10 USCA Chapter 55;

(6) a medical care program of the Indian

health service or of an Indian nation, tribe or pueblo;

(7) the Medical Insurance Pool Act;

(8) a health plan offered pursuant to

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5 USCA Chapter 89;

(9) a public health plan as defined in

federal regulations; or

(10) a health benefit plan offered pursuant

to Section 5(e) of the federal Peace Corps Act;

C. "federally defined eligible individual" means

an individual:

(1) for whom, as of the date on which the

individual seeks coverage under the Medical Insurance Pool

Act, the aggregate of the periods of creditable coverage is

eighteen or more months;

(2) whose most recent prior creditable

coverage was under a group health plan, government plan,

church plan or health insurance coverage offered in connection

with such a plan;

(3) who is not eligible for coverage under

a group health plan, Part A or Part B of Title 18 of the

Social Security Act or a state plan under Title 19 or Title 21

of the Social Security Act or a successor program and who does

not have other health insurance coverage;

(4) with respect to whom the most recent

coverage within the period of aggregate creditable coverage

was not terminated based on a factor relating to nonpayment of

premiums or fraud;

(5) who, if offered the option of

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continuation of coverage under a continuation provision

pursuant to the Consolidated Omnibus Budget Reconciliation Act

of 1985 or a similar state program elected this coverage; and

(6) who has exhausted continuation coverage

under this provision or program, if the individual elected the

continuation coverage described in Paragraph (5) of this

subsection;

D. "health care facility" means any entity

providing health care services that is licensed by the

department of health;

E. "health care services" means any services or

products included in the furnishing to any individual of

medical care or hospitalization, or incidental to the

furnishing of such care or hospitalization, as well as the

furnishing to any person of any other services or products for

the purpose of preventing, alleviating, curing or healing

human illness or injury;

F. "health insurance" means any hospital and

medical expense-incurred policy; nonprofit health care service

plan contract; health maintenance organization subscriber

contract; short-term, accident, fixed indemnity, specified

disease policy or disability income contracts; limited benefit

insurance; credit insurance; or as defined by Section 59A-7-3

NMSA 1978. "Health insurance" does not include insurance

arising out of the Workers' Compensation Act or similar law,

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automobile medical payment insurance or insurance under which

benefits are payable with or without regard to fault and that

is required by law to be contained in any liability insurance

policy;

G. "health maintenance organization" means any

person who provides, at a minimum, either directly or through

contractual or other arrangements with others, basic health

care services to enrollees on a fixed prepayment basis and who

is responsible for the availability, accessibility and quality

of the health care services provided or arranged, or as

defined by Subsection M of Section 59A-46-2 NMSA 1978;

H. "health plan" means any arrangement by which

persons, including dependents or spouses, covered or making

application to be covered under the pool have access to

hospital and medical benefits or reimbursement, including

group or individual insurance or subscriber contract; coverage

through health maintenance organizations, preferred provider

organizations or other alternate delivery systems; coverage

under prepayment, group practice or individual practice plans;

coverage under uninsured arrangements of group or group-type

contracts, including employer self-insured, cost-plus or other

benefits methodologies not involving insurance or not subject

to New Mexico premium taxes; coverage under group-type

contracts that are not available to the general public and can

be obtained only because of connection with a particular

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organization or group; and coverage by medicare or other

governmental benefits. "Health plan" includes coverage

through health insurance;

I. "insured" means an individual resident of this

state who is eligible to receive benefits from any insurer or

other health plan;

J. "insurer" means:

(1) an insurance company authorized to

transact health insurance business in this state, a nonprofit

health care plan, a health maintenance organization and self-

insurers not subject to federal preemption. "Insurer" does

not include an insurance company that is licensed under the

Prepaid Dental Plan Law or a company that is solely engaged in

the sale of dental insurance and is licensed not under that

act, but under another provision of the Insurance Code; or

(2) a reinsurer or any insurer from whom a

person providing health insurance procures insurance for

itself or the insured, with respect to all or part of the

health insurance risk of the person;

K. "medicare" means coverage under Part A or

Part B of Title 18 of the Social Security Act, as amended;

L. "pool" means the New Mexico medical insurance

pool;

M. "preexisting condition" means a physical or

mental condition for which medical advice, medication,

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diagnosis, care or treatment was recommended for or received

by an applicant within six months before the effective date of

coverage, except that pregnancy is not considered a

preexisting condition;

N. "therapist" means a licensed physical,

occupational, speech or respiratory therapist; and

O. "third party administrator" means a person

paying or processing health coverage claims in the state."

Section 2. Section 59A-54-4 NMSA 1978 (being Laws 1987,

Chapter 154, Section 4, as amended) is amended to read:

"59A-54-4. POOL CREATED--BOARD.--

A. There is created a nonprofit entity to be

known as the "New Mexico medical insurance pool". All

insurers and third party administrators shall organize and

remain members of the pool as a condition of their authority

to transact insurance business in this state. The board is a

governmental entity for purposes of the Tort Claims Act.

B. The superintendent shall, within sixty days

after the effective date of the Medical Insurance Pool Act,

give notice to all insurers of the time and place for the

initial organizational meetings of the pool. Each member of

the pool shall be entitled to one vote in person or by proxy

at the organizational meetings.

C. The pool shall operate subject to the

supervision and approval of the board. The board shall

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consist of the superintendent or the superintendent's

designee, who shall serve as the chair of the board, four

members appointed by the members of the pool and six members

appointed by the superintendent. The members appointed by the

superintendent shall consist of four citizens who are not

professionally affiliated with an insurer, at least two of

whom shall be individuals who are insured by the pool, who

would qualify for pool coverage if they were not eligible for

particular group coverage or who are a parent, guardian,

relative or spouse of such an individual. The

superintendent's fifth appointment shall be a representative

of a statewide health planning agency or organization. The

superintendent's sixth appointment shall be a representative

of the medical community.

D. The members of the board appointed by the

members of the pool shall be appointed for initial terms of

four years or less, staggered so that the term of one member

shall expire on June 30 of each year. The members of the

board appointed by the superintendent shall be appointed for

initial terms of five years or less, staggered so that the

term of one member expires on June 30 of each year. Following

the initial terms, members of the board shall be appointed for

terms of three years. If the members of the pool fail to make

the initial appointments required by this subsection within

sixty days following the first organizational meeting, the

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superintendent shall make those appointments. Whenever a

vacancy on the board occurs, the superintendent shall fill the

vacancy by appointing a person to serve the balance of the

unexpired term. The person appointed shall meet the

requirements for initial appointment to that position.

Members of the board may be reimbursed from the pool subject

to the limitations provided by the Per Diem and Mileage Act

and shall receive no other compensation, perquisite or

allowance.

E. The board shall submit a plan of operation to

the superintendent and any amendments to it necessary or

suitable to assure the fair, reasonable and equitable

administration of the pool.

F. The superintendent shall, after notice and

hearing, approve the plan of operation, provided it is

determined to assure the fair, reasonable and equitable

administration of the pool and provides for the sharing of

pool losses on an equitable, proportionate basis among the

members of the pool. The plan of operation shall become

effective upon approval in writing by the superintendent

consistent with the date on which coverage under the Medical

Insurance Pool Act is made available. If the board fails to

submit a plan of operation within one hundred eighty days

after the appointment of the board, or any time thereafter

fails to submit necessary amendments to the plan of operation,

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the superintendent shall, after notice and hearing, adopt and

promulgate such rules as are necessary or advisable to

effectuate the provisions of the Medical Insurance Pool Act.

Rules promulgated by the superintendent shall continue in

force until modified by the superintendent or superseded by a

subsequent plan of operation submitted by the board and

approved by the superintendent.

G. Any reference in law, rule, division bulletin,

contract or other legal document to the New Mexico

comprehensive health insurance pool shall be deemed to refer

to the New Mexico medical insurance pool."

Section 3. Section 59A-54-10 NMSA 1978 (being Laws

1989, Chapter 154, Section 10, as amended by Laws 2005,

Chapter 301, Section 5 and by Laws 2005, Chapter 305, Section

5) is amended to read:

"59A-54-10. ASSESSMENTS.--

A. Following the close of each fiscal year, the

pool administrator shall determine the net premium, being

premiums less administrative expense allowances, the pool

expenses and claim expense losses for the year, taking into

account investment income and other appropriate gains and

losses. The assessment for each insurer shall be determined

by multiplying the total cost of pool operation by a fraction

the numerator of which equals that insurer's premium and

subscriber contract charges or their equivalent for health

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insurance written in the state during the preceding calendar

year and the denominator of which equals the total of all

premiums and subscriber contract charges written in the state;

provided that premium income shall include receipts of

medicaid managed care premiums but shall not include any

payments by the secretary of health and human services

pursuant to a contract issued under Section l876 of the Social

Security Act, as amended. The board may adopt other or

additional methods of adjusting the formula to achieve equity

of assessments among pool members, including methods based

upon the number of persons they cover.

B. The board shall make a reasonable effort to

ensure that each covered individual is counted only once with

respect to any assessment. The board shall require each

insurer that obtains excess or stop-loss insurance to include

in its count of covered individuals all individuals whose

coverage is insured, including through excess or stop-loss

insurance, in whole or in part. The board shall allow a

reinsurer to exclude from its count of covered individuals

those individuals that have been counted by the primary

insurer or by the primary reinsurer, primary excess reinsurer

or stop-loss insurer to determine the assessment pursuant to

this section.

C. If assessments exceed actual losses and

administrative expenses of the pool, the excess shall be held

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at interest and used by the board to offset future losses or

to reduce pool premiums. As used in this subsection, "future

losses" includes reserves for incurred but not reported

claims.

D. The proportion of participation of each member

in the pool shall be determined annually by the board based on

annual statements and other reports deemed necessary by the

board and filed with it by the member. Any deficit incurred

by the pool shall be recouped by assessments apportioned among

the members of the pool pursuant to the assessment formula

provided by Subsection A of this section; provided that the

assessment for any pool member shall be allowed as a fifty-

percent credit on the premium tax return for that member and a

seventy-five-percent credit on the premium tax return for a

member for the assessments attributable to pool policy holders

that receive premiums, in whole or in part, through the

federal Ryan White CARE Act, the Ted R. Montoya hemophilia

program at the university of New Mexico health sciences

center, the children's medical services bureau of the public

health division of the department of health or other programs

receiving state funding or assistance.

E. The board shall adopt a formula to provide a

credit or rebate against the assessment for a third party

administrator that does not pay a premium tax that is

substantially equivalent to the premium tax credit pursuant to

Subsection D of this section. The third party administrator

shall pass any assessment rebate or credit to the person for

whom the administrator provides services.

F. The board may abate or defer, in whole or in

part, the assessment of a member of the pool if, in the

opinion of the board, payment of the assessment would endanger

the ability of the member to fulfill its contractual

obligation. In the event an assessment against a member of

the pool is abated or deferred in whole or in part, the amount

by which such assessment is abated or deferred may be assessed

against the other members in a manner consistent with the

basis for assessments set forth in Subsection A of this

section. The member receiving the abatement or deferment

shall remain liable to the pool for the deficiency for four

years."

Section 4. APPLICABILITY.--The premium tax credit in

Section 3 of this act shall apply to assessments made pursuant

to the Medical Insurance Pool Act beginning on or after July

1, 2007.

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