HB-4576, As Passed House, December 12, 2013

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4576

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending section 102 (MCL 500.102), as amended by 2000 PA 252,

 

and by adding chapter 12A.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 102. (1) "Commissioner" as used in this act means the

 

commissioner of the office of financial and insurance

 

services.director.

 

     (2) "Department" as used in this act means the office of

 

financial and insurance services.department of insurance and

 

financial services.

 

     (3) "Director" as used in this act, unless the context clearly

 

implies a different meaning, means the director of the department

 


of insurance and financial services.

 

CHAPTER 12A

 

     Sec. 1261. As used in this chapter:

 

     (a) "Affordable care act" means the patient protection and

 

affordable care act, Public Law 111-148, as amended by the health

 

care and education reconciliation act of 2010, Public Law 111-152.

 

     (b) "Agent" means an insurance producer.

 

     (c) "Business entity" means a corporation, association,

 

partnership, limited liability company, limited liability

 

partnership, or other legal entity.

 

     (d) "Certificate" means a document issued by the director

 

authorizing a person to act as a navigator for the qualifications

 

specified in the document. The certificate itself does not create

 

any actual, apparent, or inherent authority in the holder to

 

represent or commit an insurer.

 

     (e) "Exchange" means an American health benefits exchange

 

established or operating pursuant to the affordable care act.

 

     (f) "Home state" means the District of Columbia or any state

 

or territory of the United States in which an insurance producer

 

maintains his or her principal place of residence or principal

 

place of business and is licensed to act as an insurance producer.

 

     (g) "Insurance" means any of the lines of authority in chapter

 

6.

 

     (h) "Insurance producer" means a person required to be

 

licensed under the laws of this state to sell, solicit, or

 

negotiate insurance.

 

     (i) "Navigator" means a person that receives any funding from

 


an exchange or the federal government and is designated or selected

 

by an exchange or the federal government to perform any of the

 

duties identified in 42 USC 18031(i)(3).

 

     (j) "Negotiate" means the act of conferring directly with or

 

offering advice directly to a purchaser or prospective purchaser of

 

a particular contract of insurance concerning any of the

 

substantive benefits, terms, or conditions of the contract,

 

provided that the person engaged in that act either sells insurance

 

or obtains insurance from insurers for purchasers.

 

     (k) "Sell" means to exchange a contract of insurance by any

 

means, for money or its equivalent, on behalf of an insurance

 

company.

 

     (l) "Solicit" means attempting to sell insurance or asking or

 

urging a person to apply for a particular kind of insurance from a

 

particular company.

 

     Sec. 1262. (1) An individual shall not act as a navigator as

 

described in 42 USC 18031(i)(3) unless he or she has filed an

 

application under section 1263 and is certified with this state as

 

a navigator.

 

     (2) Unless certified as a navigator, an individual shall not

 

receive funding from an exchange.

 

     (3) A navigator shall do all of the following:

 

     (a) Conduct public education activities to raise awareness of

 

the availability of qualified health plans.

 

     (b) Distribute fair and impartial information concerning

 

enrollment in all qualified health plans offered within the

 

exchange and the availability of the premium tax credits under

 


section 36B of the internal revenue code of 1986, 26 USC 36B, and

 

cost-sharing reduction under section 1402 of the affordable care

 

act.

 

     (c) Facilitate selection of a qualified health plan.

 

     (d) Provide referrals to appropriate state agencies for an

 

enrollee with a grievance, complaint, or question regarding the

 

enrollee's health plan, coverage, or a determination under such

 

plan coverage.

 

     (e) Provide information in a manner that is culturally and

 

linguistically appropriate to the needs of the population served by

 

the exchange.

 

     (4) A navigator shall not do any of the following:

 

     (a) Sell, solicit, or negotiate health insurance.

 

     (b) Endorse any particular health benefit plan or group of

 

health benefit plans.

 

     (c) Provide any information or services related to health

 

benefit plans or other products not offered in the exchange.

 

     (5) If an exchange is operational in this state, the director

 

shall determine whether a program to certify and train navigators,

 

other than a program established by this state, protects the

 

privacy and security of personally identifiable information of the

 

residents of this state under the laws of this state. If the

 

director determines that the program does not protect the residents

 

of this state under this subsection, the director shall do all of

 

the following:

 

     (a) Establish a certification and training program for a

 

prospective navigator. The certification and training program shall

 


include, but is not limited to, all of the following:

 

     (i) A criminal history check using the department of state

 

police's internet criminal history access tool (ICHAT).

 

     (ii) Training on compliance with the health insurance

 

portability and accountability act of 1996, Public Law 104-191, or

 

regulations promulgated under that act, training on ethics,

 

training on provisions of the affordable care act relating to

 

navigators, and any necessary state-specific training as determined

 

by the director.

 

     (b) Develop an application and disclosure form by which a

 

navigator shall disclose any potential conflicts of interest, as

 

well as any other information required by the director.

 

     Sec. 1263. (1) An individual applying for a navigator

 

certificate shall file with the director the uniform application

 

required by the director and shall declare under penalty of

 

refusal, suspension, or revocation of the certificate that the

 

statements made in the application are true, correct, and complete

 

to the best of the individual's knowledge and belief. An

 

application for a navigator's certificate shall not be approved

 

unless the director finds that the individual meets all of the

 

following:

 

     (a) Is at least 18 years of age.

 

     (b) Has not committed any act listed that would be a ground

 

for denial, suspension, or revocation of an insurance producer's

 

license in section 1239(1).

 

     (c) Has completed all required training courses under section

 

1262.

 


     (d) Has paid the fees required by the director.

 

     (e) Has successfully passed any required examination.

 

     (f) Has successfully completed a criminal history check under

 

section 1262.

 

     (2) A business entity acting as a navigator shall obtain a

 

navigator certificate. A business entity applying for a navigator

 

certificate shall file with the director the uniform business

 

entity application required by the director. An application for a

 

navigator certificate under this subsection shall not be approved

 

unless the director finds that the business meets all of the

 

following:

 

     (a) The business entity has paid the fees required by the

 

director.

 

     (b) The business entity has designated an individual certified

 

navigator responsible for the business entity's compliance with

 

this state's insurance laws, rules, and regulations.

 

     (c) The business entity has not committed any act listed in

 

section 1239(1).

 

     (2) The director may require the production of any documents

 

reasonably necessary to verify the information contained in an

 

application.

 

     Sec. 1264. (1) In addition to any other powers under this act,

 

the director may place on probation, suspend, or revoke a

 

navigator's certificate or may levy a civil fine under section 1270

 

or any combination of actions, and the director shall refuse to

 

issue a navigator certificate under section 1263, for any 1 or more

 

causes that would be a ground for refusal, suspension, or

 


revocation of an insurance producer's license under section 1239.

 

Beginning October 1, 2013, the director shall revoke a navigator

 

certificate of any person or refuse to issue a navigator

 

certificate for a person that receives financial compensation,

 

including monetary and in-kind compensation, gifts, or any

 

compensation related to enrollment from an insurer offering

 

qualified health benefits through an exchange operating in this

 

state. The director may deny, suspend, approve, renew, or revoke

 

the certificate of a navigator if the director considers it

 

necessary to protect insureds and the public.

 

     (2) The navigator certificate of a business entity may be

 

suspended, revoked, or refused if the director finds, after

 

hearing, that an individual navigator's violation was known or

 

should have been known by 1 or more of the partners, officers, or

 

managers acting on behalf of the business entity and the violation

 

was neither reported to the director nor corrective action taken.

 

     (3) The director may examine the books and records of a

 

navigator to determine whether the navigator is conducting its

 

business in accordance with this chapter. For the purpose of

 

facilitating the examination, the navigator shall allow the

 

director free access, at reasonable times, to all of the

 

navigator's books and records relating to transactions to which

 

this chapter applies.

 

     Sec. 1265. A business entity certified as a navigator shall,

 

in a manner prescribed by the director, make available a list of

 

all individual navigators that the business entity employs or

 

supervises or with which the business entity is otherwise

 


affiliated.

 

     Sec. 1266. A business entity that terminates the employment,

 

engagement, affiliation, or other relationship with an individual

 

navigator shall notify the director using a format prescribed by

 

the director of the termination within 30 days following the

 

effective date of the termination if the reason for termination is

 

1 of the reasons listed in section 1239 or the business entity has

 

knowledge the individual navigator was found by a court or

 

government body to have engaged in any of the activities listed in

 

section 1239.

 

     Sec. 1268. (1) When applying for a certificate to act as a

 

navigator, the applicant shall report his or her mailing and

 

electronic mail address to the director. A navigator shall notify

 

the director of any change in his or her mailing or electronic mail

 

address within 30 days after the change. The director shall

 

maintain the mailing and electronic mail address of each navigator

 

on file.

 

     (2) A notice of hearing or service of process may be served

 

upon a navigator in any action or proceeding for a violation of

 

this act by mailing the notice or process by first-class mail to

 

the navigator's mailing address reported to the director under

 

subsection (1).

 

     Sec. 1269. (1) The director shall refuse to grant a

 

certificate to act as a navigator to an applicant who fails to meet

 

the requirements of this chapter. Notice of the refusal shall be in

 

writing and shall set forth the basis for the refusal. If the

 

applicant submits a written request within 30 days after mailing of

 


the notice of refusal, the director shall promptly conduct a

 

hearing in which the applicant shall be given an opportunity to

 

show compliance with the requirements of this chapter.

 

     (2) The director, after notice of and opportunity for a

 

hearing, may suspend or revoke the certificate of a navigator who

 

fails to maintain the standards required for initial certification

 

or who violates any provision of this act.

 

     (3) Without prior hearing, the director may order summary

 

suspension of a certificate if he or she finds that protection of

 

the public requires emergency action and incorporates this finding

 

in his or her order. The suspension shall be effective on the date

 

specified in the order or upon service of a certified copy of the

 

order on the certificate holder, whichever is later. If requested,

 

the director shall conduct a hearing on the suspension within a

 

reasonable time but not later than 20 days after the effective date

 

of the summary suspension unless the person whose certificate is

 

suspended requests a later date. At the hearing, the director shall

 

determine if the suspension should be continued or if the

 

suspension should be withdrawn, and, if proper notice is given, may

 

determine if the certificate should be revoked. The director shall

 

announce his or her decision within 30 days after conclusion of the

 

hearing. The suspension shall continue until the decision is

 

announced.

 

     (4) The director, or his or her designated deputy, may issue

 

subpoenas to require the attendance and testimony of witnesses and

 

the production of documents necessary to the conduct of the hearing

 

and may designate a department employee to make service. The

 


subpoenas issued by the director, or his or her designated deputy,

 

may be enforced upon petition to the circuit court of Ingham county

 

to show cause why a contempt order should not be issued, as

 

provided by law.

 

     Sec. 1270. (1) If the director finds that a person has

 

violated this chapter, after an opportunity for a hearing pursuant

 

to the administrative procedures act of 1969, 1969 PA 306, MCL

 

24.201 to 24.328, the director shall reduce the findings and

 

decision to writing and shall issue and cause to be served upon the

 

person charged with the violation a copy of the findings and an

 

order requiring the person to cease and desist from the violation.

 

In addition, the director may order any of the following:

 

     (a) Payment of a civil fine of not more than $500.00 for each

 

violation. However, if the person knew or reasonably should have

 

known that he or she was in violation of this chapter, the director

 

may order the payment of a civil fine of not more than $2,500.00

 

for each violation. An order of the director under this subsection

 

shall not require the payment of civil fines exceeding $25,000.00.

 

A fine collected under this subdivision shall be turned over to the

 

state treasurer and credited to the general fund of the state.

 

     (b) The suspension or revocation of the person's navigator

 

certificate.

 

     (2) The director may by order, after notice and opportunity

 

for hearing, reopen and alter, modify, or set aside, in whole or in

 

part, an order issued under this section, if in the opinion of the

 

director conditions of fact or of law have changed to require that

 

action, or if the public interest requires that action.

 


     (3) If a person knowingly violates a cease and desist order

 

under this chapter and has been given notice and an opportunity for

 

a hearing held pursuant to the administrative procedures act of

 

1969, 1969 PA 306, MCL 24.201 to 24.328, the director may order a

 

civil fine of not more than $10,000.00 for each violation, or a

 

suspension or revocation of the person's navigator certificate, or

 

both. An order issued by the director pursuant to this subsection

 

shall not require the payment of civil fines exceeding $50,000.00.

 

A fine collected under this subsection shall be turned over to the

 

state treasurer and credited to the general fund of the state.

 

     (4) The director may apply to the circuit court of Ingham

 

county for an order of the court enjoining a violation of this

 

chapter.

 

     Sec. 1271. This chapter does not authorize or shall not be

 

construed to authorize the establishment or operation of an

 

American health benefit exchange in this state pursuant to the

 

patient protection and affordable care act, Public Law 111-148, as

 

amended by the health care and education reconciliation act of

 

2010, Public Law 111-152.

 

     Enacting section 1. (1) This amendatory act shall not be

 

construed to do any of the following:

 

     (a) Authorize the establishment or operation of an American

 

health benefit exchange in this state pursuant to the patient

 

protection and affordable care act, Public Law 111-148, as amended

 

by the health care and education reconciliation act of 2010, Public

 

Law 111-152.

 

     (b) Authorize this state or an agency of this state to conduct

 


or oversee state-level governmental consumer assistance functions

 

for an American health benefit exchange established or operating in

 

this state pursuant to the patient protection and affordable care

 

act, Public Law 111-148, as amended by the health care and

 

education reconciliation act of 2010, Public Law 111-152.

 

     (c) Convey any administrative, statutory, rule-making, or

 

other power to this state or an agency of this state to authorize,

 

establish, or operate an American health benefit exchange in this

 

state that did not exist before the effective date of this

 

amendatory act.

 

     (2) It is the intent of this legislature that any consumer

 

assistance functions by or overseen by this state or an agency of

 

this state with regard to an American health benefit exchange shall

 

be conducted in a manner that utilizes and highlights Michigan-

 

based resources, including insurance producers, in order to best

 

serve the residents of this state and to ensure appropriate health

 

care decisions.

 

     Enacting section 2. This amendatory act applies to policies,

 

certificates, or contracts delivered, issued for delivery, or

 

renewed in this state on and after the effective date of this

 

amendatory act.